San Francisco Sues McKesson Over Inflated Brand-Name Drug Prices
In a lawsuit filed on Tuesday, the city of San Francisco alleged that McKesson, the nation's largest prescription drug distributor, artificially inflated the cost of brand-name drugs, costing the city and state hundreds of millions of dollars, the San Francisco Chronicle reports.
The San Francisco Health Plan and City Attorney Dennis Herrera filed the suit in U.S. District Court in Boston claiming that since 2001, McKesson has increased the difference between what pharmacies paid wholesale drug manufacturers and the benchmark price for more than 400 drugs, including Allegra, Lipitor, Nexium, Valium and others (Colliver, San Francisco Chronicle, 5/21).
The difference between the two prices was alleged to have been arbitrarily increased by as much as 25%.
McKesson executives said they "believe the allegations lack merit and intend to vigorously defend ourselves" (Young, San Francisco Business Times, 5/20).
The lawsuit is similar to a class-action suit filed in 2005 involving private consumers and health care payers. San Francisco is the first government entity to bring drug price-fixing charges against McKesson.
The earlier suit alleged that First DataBank, a drug information provider, was supposed to survey wholesalers about their drug prices for pharmacy reimbursements but only surveyed McKesson.
According to the Chronicle, First DataBank is cited as "an unnamed co-conspirator" in the San Francisco lawsuit (San Francisco Chronicle, 5/21).