Pharma price-fixing under renewed investigation

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Pharma price-fixing under renewed investigation

Generics/General | Posted 10/09/2010 0 Post your comment

Some of the world’s biggest drug companies are having once again to face up to price-fixing allegations thanks to the Supreme Court of California. These allegations were dismissed by a lower court two years ago. The suit claims that the 18 drug manufacturers, including Pfizer, GlaxoSmithKline, AstraZeneca, Merck and Eli Lilly amongst others, not only set artificially high prices, but also conspired to keep cheaper Canadian drugs off the US market and to stave off generic competitors.

The plaintiffs in the case are pharmacies. As intermediaries between Big Pharma and consumers, they lost the lower court decision due to the so-called “pass-on” defence. The argument was that the pharmacies did not lose any money, as they passed on the overcharge to consumers, and they therefore could not seek damages.

The California Supreme Court rejected the ‘pass-on’ defence argument and sent the case back to court in Oakland, California, USA.

This is bad news for big pharma who could face large damage claims, but good news for generics as it will hopefully deter future actions to prevent generics entering the market.

Reference

Supreme Court of California. James Clayworth et al. versus Pfizer Inc. et al.Case S166435, California Supreme Court (San Francisco).