The U.S. District Court for the District of Massachusetts has certified a class action lawsuit against one of the world’s largest distributors of pharmaceuticals. The San Francisco-based McKesson Corporation has been accused of inflating the prices of hundreds of brand-name prescription drugs, including some of the most prescribed, such as Prozac and Lipitor.
The lawsuit was filed on behalf of cities, counties and other municipalities that overpaid for medications between August 2001 and June 2005. It alleges that McKesson intentionally inflated the average wholesale price – the price at which wholesalers sell drugs to physicians, pharmacies and others – of hundreds of brand-named drugs, resulting in overpayment by public entities. Damages could run into the hundreds of millions of dollars.
A similar class action lawsuit on behalf of consumers and private payers was settled by McKesson for $350 million.
McKesson has revenues of more than $100 billion, according to Fortune magazine, which ranked the company at No. 14 on its Fortune 500 list last year. According to the magazine, as the nation’s largest distributor of pharmaceuticals, McKesson processes 4.5 million items a day and has branched out to other parts of the healthcare industry, including digitizing patient records and developing after-hours prescription machines.
"While we would have liked to see the court decline to certify any class, we are pleased that the judge so dramatically reduced the scope of the requested class by restricting class membership, certifying only a single claim and shortening the class time period," said McKesson spokesperson, Megan Hawkins. "We believe the plaintiffs' claims are without merit and we will vigorously defend ourselves."