Drug firms lose bid in court
GlaxoSmithKline PLC, Bristol-Myers Squibb Co., and other drug makers lost a bid to dismiss a lawsuit that accused them of violating federal antitrust laws in determining prices for a discount prescription drug plan.
US District Judge Patti Saris in Boston refused to dismiss a lawsuit that said the industry publishes inflated drug prices to increase the amount doctors receive through Medicare, the health insurance program for 40 million elderly and disabled Americans.
Medicare spends billions of dollars annually on prescription medicines administered by doctors. A group of consumers, states and health benefits plans sued the industry, including Pfizer Inc., Johnson & Johnson and AstraZeneca PLC, naming 321 drugs with prices they believe to be inflated.
"We didn't make these allegations lightly," said Stephen Rosenfeld, interim director for Prescription Access Litigation Project, a consumer health advocacy group that sued on behalf of consumers. "We made them based on the record that had been disclosed."
Saris said the consumers "have set forth sufficient facts" to make the allegations concerning racketeering and price-fixing in the Together Rx plan, which gives lower-income senior citizens discounts as large as 40 percent on drugs made by the companies and sold at participating pharmacy chains.
D. Scott Wise, the lead attorney for the drug makers, didn't immediately return a message left at his office after regular business hours.
State and federal authorities are investigating companies' pricing practices as spending on medicines rises more than 10 percent a year. The US government bases payments on average wholesale prices reported by drug makers to independent companies that publish the information. US regulations don't provide guidance on what prices to report. Congress has changed the law and the Bush administration will gather new pricing information in the next couple of months.
In some cases, drug makers have reported prices 10,000 percent higher than what doctors paid for the products, the consumers contend.
