Fourteen California Pharmacies File Suit Against 15 Pharmaceutical Companies Over Alleged Antitrust Violations
Fourteen independent pharmacies in California on Thursday filed a lawsuit against 15 large pharmaceutical companies for allegedly "conspiring" to maintain "artificially high prices for their drugs in the United States" and block the purchase of lower-cost medications from Canada and other nations, the Los Angeles Times reports (Peltz, Los Angeles Times, 8/27). According to the lawsuit, the pharmaceutical companies, which include Pfizer, Merck, AstraZeneca and GlaxoSmithKline, have created an "artificial trade barrier and wall around the United States for the purpose of preventing the importation of any lower-priced drugs into the United States, including California," in violation of federal antitrust laws.
The lawsuit, filed in Alameda County Superior Court by local antitrust attorney Joseph Alioto, also alleges that the pharmaceutical companies have violated California unfair business practices laws through "intimidation, coercion and bribery" (Lee, San Francisco Chronicle, 8/27). According to the lawsuit, the practices used by the pharmaceutical companies have left the plaintiffs at a "competitive disadvantage to Canadian and Mexican pharmacies," as well as a "growing number" of online pharmacies (Los Angeles Times, 8/27). The lawsuit also names the Pharmaceutical Research and Manufacturers of America as a defendant (San Francisco Chronicle, 8/27).
The lawsuit seeks a reduction in U.S. prescription drug prices and payments to the plaintiffs for the "difference between what they paid for the drugs and what foreigners paid in the past four years," USA Today reports (Appleby, USA Today, 8/27). In addition, the lawsuit seeks other unspecified damages and an injunction to require the pharmaceutical companies to charge U.S. consumers the same prices that they charge consumers in other nations. The lawsuit alleges that the pharmaceutical companies charge U.S. pharmacies as much as 400% more than those in other nations (Los Angeles Times, 8/27).
Pharmaceutical companies in the past have said that they charge U.S. consumers higher prices to recoup research and development costs (AP/Contra Costa Times, 8/27).
Alioto said that the lawsuit would focus more on medication prices than the issue of prescription drug reimportation. "We should be getting the same prices in the United States and in California as all the foreign countries are getting for the same drugs made with the same ingredients," Alioto said (Los Angeles Times, 8/27). He added, "The reason they are trying to prevent cheaper drugs from coming into the U.S. is they are protecting the U.S. market, where they have fixed high prices" (USA Today, 8/27).
Harry Ambrunn, who operates El Camino Pharmacy, one of the plaintiffs in the lawsuit, said, "What we are looking for is the ability to buy drugs from the major manufacturers at the same price as they sell those same drugs to the government, HMOs and insurance companies," adding, "Canada is becoming a huge problem" (San Francisco Chronicle, 8/27).
Many of the pharmaceutical companies named as defendants in the lawsuit, as well as PhRMA, declined to comment on the case.
AstraZeneca spokesperson Michele Meeker said that the company "believes the claims are without merit and intends to defend itself vigorously" (Los Angeles Times, 8/27). GSK spokesperson Nancy Pekarek denied the allegations in the lawsuit and said that the company "does not discuss or negotiate its pricing with other companies" (USA Today, 8/27). Pfizer spokesperson Bryant Haskins said, "We realize a number of people in this country are not able to find affordable drugs, and we are sympathetic to that" (San Francisco Chronicle, 8/27). He added, "While Pfizer hasn't had an opportunity to review this lawsuit in detail, any allegations of price fixing are totally without merit. Importation of pharmaceutical products into the U.S. market is both illegal and dangerous because it increases the opportunity to introduce counterfeit or unapproved drugs into the distribution system" (AP/Contra Costa Times, 8/27).
Some attorneys who have represented pharmaceutical companies in the past said that they were "skeptical the case will be successful," USA Today reports.
"Usually, antitrust defines a market in the United States and doesn't try to compare it with a market beyond the jurisdiction of American antitrust laws," Marc Scheineson of Alston & Bird said. Jim Czabar of Heller Ehrman said that other nations have price controls on prescription drugs, and the "fact that the same product is sold in other countries for a lower price does not mean you are violating U.S. law by selling under market conditions" (USA Today, 8/27).