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Attorney Steve W. Berman filed the suit in 2006 on behalf of third-partypayers and consumers, claiming that McKesson engaged in a scheme tofraudulently inflate the price of more than 400 prescription drugs, includingblockbusters such as Prozac, Lipitor, Zocor, Vioxx and more.
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On March 18, 2008, Judge Patti Saris for a second time rejected McKesson'smotions to dismiss the case, citing the strength of the evidence, whichincludes volumes of e-mail exchanges by McKesson executives discussing theprice-fixing scheme. The plaintiffs in the case peg the damages at$4 billion, which puts McKesson at risk of a $12 billion judgment with thetripling of damages allowed by the RICO statute under which the suits werefiled.
RICO -- the Racketeer Influenced and Corrupt Organizations Act -- allowsfor civil action against those believed to participate in conspiracies tocommit crimes or illegally reap profits. The law calls for the disgorgementof ill-gotten profits and the tripling of damages.
Judge Patti Saris earlier this week dismissed a related case charging thedrug giant of antitrust violations.
"We believe the antitrust laws were intended to address the sort ofdisingenuous behavior McKesson exhibited, but we recognize that theallegations presented a context not directly addressed by prior case-law,"Berman said. "We understand and appreciate Judge Saris' ruling, and are eagerto move forward with the strongest case -- the RICO charges."
The case represents two classes: consumer purchasers, which includesanyone who made a co-payment for prescription medication from August 1, 2001through May 15, 2005, and all third-party payers that made a payment orreimbursement based on the inflated average wholesale price (AWP) during theclass period.
The suit claims McKesson and First DataBank, a publishing company, reacheda secret agreement on how the average wholesale price would be set forbrand-name drugs and, in doing so, raised the spread between the published AWPand the actual acquisition costs from 20 to 25 percent in an effort toincrease profits.
Earlier this year, First DataBank settled with plaintiffs, leavingMcKesson as the sole defendant.
According to documents cited in the case, McKesson communicated the priceincrease to First DataBank, who published the information, even amid questionsby manufacturers who recognized the impact to consumers and third-partypayers. McKesson did so to raise the profits for its large clients like RiteAid and Walgreen's.
For more information on this case and to sign up as a consumer orthird-party payer you can visit the Hagens Berman Web site athttp://www.hbsslaw.com.
About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro, is based in Seattle with offices in Chicago,Cambridge, Los Angeles, Phoenix, San Francisco and New York. Since 1993, ithas developed a nationally recognized practice in class-action and complexlitigation. Among recent successes, HBSS has negotiated a $300 millionsettlement in the DRAM memory antitrust litigation, one of the largestanti-trust settlements in history; a $340 million recovery on behalf of Enronemployees; a $150 million settlement involving charges of illegally inflatedcharges for the drug Lupron, and served as co-counsel on the Visa/Mastercardlitigation which resulted in a $3 billion settlement, the largest anti-trustsettlement to date. HBSS served as counsel in a $850 million WashingtonPublic Power Supply settlement and represented Washington and 12 other
