BOSTON, March 24 /PRNewswire/ -- Last week a United States District
Court judge certified a nationwide class-action lawsuit against McKesson
Corporation (NYSE: MCK) that could become the largest class action in the
United States, potentially totaling $7 billion in damages for consumers and
The lawsuit, filed by Seattle-based Hagens Berman Sobol Shapiro in 2006
on behalf of third party payers and consumers, claims that McKesson engaged
in a scheme to fraudulently inflate the price of more than 400 prescription
drugs, including blockbusters such as Prozac, Lipitor, Zocor, Vioxx and
"We have been fighting this battle on behalf of smaller groups for
years," said Hagens Berman managing partner and lead attorney Steve Berman.
"With this ruling we now have the opportunity to represent millions of
Americans nationwide who have been affected by McKesson's unlawful
The judge's ruling allows this case to move forward on behalf of two
classes: consumer purchasers, which includes anyone who made a co-payment
for prescription medication from August 1, 2001 through May 15, 2005, and
all third-party payers that made a payment or reimbursement based on the
inflated average wholesale price (AWP) during the class period.
The original lawsuit claims McKesson and First DataBank, a publishing
company, reached a secret agreement on how the average wholesale price
would be set for brand-named drugs, and in doing so, raised the spread
between the published AWP and the actual acquisition costs from 20 to 25
percent in an effort to increase profits.
According to documents cited in the court's order McKesson communicated
the price increase to First Databank, who published the information, even
amid questions by manufacturers who recognized the impact to consumers and
third-party payers. McKesson did so to raise the profits for its large
clients like Rite Aid and Walgreen's.
In her ruling, Judge Saris cited internal documents where McKesson
boasted that by the end of 2004 nearly "99%" of all brand-name drugs were
set at a higher price as a result of the scheme. The order also noted that
pharmacy benefit managers (PBMs) benefited from the scheme and cited a top
secret Express Scripts document where an executive cautioned to "put a lid
on" the financial benefit ESI was receiving from the price increase.
Attorneys estimate that damages on behalf of consumers could total from
$200 to $800 million and damages on behalf of third-party payers will
exceed $5 billion.
In August of 2007, Judge Saris initially certified the class of
third-party payers, but not for damages, which last week's ruling includes.
McKesson argued that third-party payers each have a unique contract with
its PBMs, which allows for negotiation in drug pricing.
The lawsuit claims McKesson violated the federal Racketeer Influenced
and Corrupt Organizations (RICO) act, and if found guilty, could be forced
to pay treble damages under the RICO statute as well as under various
consumer protection statutes.
For more information on this case and to sign up as a consumer or
third-party payer you can visit the Hagens Berman Web site at
About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro, is based in Seattle with offices in
Chicago, Cambridge, Los Angeles, Phoenix and San Francisco. Since 1993, it
has developed a nationally recognized practice in class-action and complex
litigation. Among recent successes, HBSS has negotiated a $300 million
settlement in the DRAM memory antitrust litigation, one of the largest
anti-trust settlements in history; a $340 million recovery on behalf of
Enron employees; a $150 million settlement involving charges of illegally
inflated charges for the drug Lupron, and served as co-counsel on the
Visa/Mastercard litigation which resulted in a $3 billion settlement, the
largest anti-trust settlement to date. HBSS served as counsel in a $850
million Washington Public Power Supply settlement and represented
Washington and 12 other states against the tobacco industry that resulted
in the largest settlement in history. For a complete listing of HBSS cases,
Steve Berman (206) 623-7292
Hagens Berman Sobol Shapiro
Mark Firmani (206) 443-9357
Firmani + Associates Inc.
SOURCE Hagens Berman Sobol Shapiro