US chemists sue drug giants over pricing

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The Independent Online
US DRUG companies, including subsidiaries of Glaxo and SmithKline Beecham, have been accused of price-fixing by more than 5,000 American retail chemists.

Led by Rite-Aid, which has 2,600 outlets, the pharmacies are suing the drug groups for forcing them to pay more for their products than bulk purchasers like hospitals.

Subsidiaries of Pfizer, SmithKline Beecham, Schering-Plough, Searle, Ciba-Geigy, American Home Products, Glaxo and Medco Containment Services are named in the writ, which has been lodged in a Pennsylvania district court.

The retailers are angry about the growing tendency to offer discounts to big buyers like hospitals, health maintenance organisations and mail-order companies.

'We and our millions of customers must pay as much as 12,000 per cent more for the same drugs,' Alex Grass, chairman of Rite-Aid, said. The suit seeks unspecified damages but Mr Grass said these could amount to 'billions of dollars'.

The discounts are justified by the drug companies on the size of the sales they can make - a single health maintenance organisation like Kaiser Permanente, the nation's largest, will spend billions of dollars a year on prescription drugs.

But drug companies are also often interested in having their products on the lists of preferred drugs used by hospitals, HMOs and mail-order pharmacies.

Mr Grass singled out Ventolin, Glaxo's asthma drug, saying that Glaxo had sold 500 Ventolin tablets to HMOs, hospitals and others for dollars 63.84. Pharmacies had to pay up to dollars 183.71, he said.