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Public
Employee Press Union busts
crooked drug firms Huge price fixer must pay
$350 million in damages
By GREGORY N. HEIRES
The McKesson
Corp. has agreed to pay $350 million to settle a lawsuit brought by DC 37 and
others who charged the drug wholesaler with illegally inflating the price of members
medications.
In November, McKesson agreed to settle the case, which accused
the firm of fixing prices in 2001 and 2002. The proceeds including millions
of dollars in damages for the DC 37 Health and Security Plan will go to
health plans and consumers.
In the 2006 suit, the DC 37 plan and a group
of plaintiffs charged that McKesson conspired to fraudulently inflate the prices
of more than 400 prescription drugs by manipulating price information published
by First DataBank. The suit was filed under the Racketeer Influenced and Corrupt
Organizations Act (RICO) and the settlement is one of the largest of its type.
DC
37 is fighting a huge battle to provide quality prescription drug coverage for
our members, said DC 37 Executive Director Lillian Roberts. It doesnt
help when those in the industry make it more difficult by rigging the system.
First
DataBank settled quickly, but McKesson, whose annual revenues top $500 billion,
refused to settle until now.
McKesson was charged with creating the price-fixing
scheme to benefit key retail clients who might otherwise have purchased wholesale
prescriptions from its competitors. The lawsuits charged that the McKesson/First
DataBank scheme raised the markup on hundreds of brand-name drugs from 20 percent
to 25 percent.
DC 37 and three other union members of Prescription Access
Litigation, a nationwide coalition of more than 120 senior, labor and consumer
health advocacy groups that is fighting to make prescription drugs more affordable,
participated in the lawsuit.
DC 37 Health and Security Plan Administrator
Cynthia Chin-Marshall said the plan expects compensation in the settlement for
the millions of dollars in inflated prices weve been forced to pay.
Hopefully
we have taught the drug industry a lesson and they will refrain from fixing prices
in the future, said Audrey A. Browne, the plans director of regulatory
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