McKesson Class Action Lawsuit
August 30, 2007
Via the AP:
A U.S. federal judge certified a class-action lawsuit against McKesson on behalf of consumers who claim the drug wholesaler conspired to inflate the average wholesale price (AWP) of prescription drugs used to determine payments by Medicaid and insurance plans.
The class includes consumers who made co-payments on brand name prescription medicines from August 1, 2001 to March 15, 2005, that the suit alleges had artificially inflated prices.
“Plaintiffs have a persuasive argument that the alleged fraud had a class-wide impact because the AWP baseline for negotiation of new contracts was fraudulently increased,” the Judge wrote in her ruling.
According to the complaint, beginning in late 2001, McKesson and publishing company First Databank, agreed on how the AWP would be set for brand-name drugs, raising the spread between the published AWP and actual costs in an effort to increase profits.
First DataBank earlier this year agreed to a proposed settlement of the suit that consumer advocacy groups said could cut the cost of prescription drugs paid for by health plans by up to $4 billion.
“It is clear to us that McKesson’s motivation was to extract higher profits on the backs of healthcare consumers, many of whom are stretched to the economic breaking point,” Steve Berman, a co-lead attorney for the class, said in a statement.
“We believe that the damages incurred by healthcare consumers and third party payers could range in the billions of dollars,” Berman said.
McKesson said it would not comment on pending litigation.
The McKesson Corporation, originaly founded in 1833, is a Fortune Global 500 company, the 16th largest company in the United States, and the single largest health care company in the world. Mckesson is also one of the oldest continually operating businesses in the United States.
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