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CALIFORNIA SUIT OVER PRICING PROCEEDING

SAN FRANCISCO -- A lawsuit filed March 14 by the California Pharmacists Association on behalf of the general public against Sav-On Drug, Anaheim, Calif.; Thrifty Corp., Los Angeles, and two health maintenance organizations is proceeding, following rulings on several aspects of the suit. After a hearing on June 29, a judge for the Superior Court of the State of California here denied motions by the

SAN FRANCISCO -- A lawsuit filed March 14 by the California Pharmacists Association on behalf of the general public against Sav-On Drug, Anaheim, Calif.; Thrifty Corp., Los Angeles, and two health maintenance organizations is proceeding, following rulings on several aspects of the suit. After a hearing on June 29, a judge for the Superior Court of the State of California here denied motions by the defendants to dismiss the case and cleared the way for a trial.

Cronin, vice president of legal affairs for CPhA.

"We take the suit seriously. We think our prices are fair and legitimate and we have a sound defense," said Judy Decker, spokeswoman for Sav-On. She declined to be more specific. Thrifty Corp. declined comment.

Said Jeff Folick, president and chief executive officer of PacifiCare of California: "We are surprised and concerned by the action of the California Pharmacists Association. Their goal appears to be to drive up the price of prescription drugs to millions of health plan members while our goal has been to work with pharmacies across the state to control the cost of drugs for our members.

"More than two-thirds of California's independent and chain pharmacies are part of our pharmacy network," said Folick. "We, along with many of them, hope to resolve this matter so that the goals of health care reform can continue to be met in terms of quality care and lower health care costs to our members.

"The relief that the California Pharmacists Association is seeking would be harmful to consumers," said David Olson, spokesperson for Health Net. "It

would have the effect of driving up health care costs which is not consistent with the policy of the state of California."

All four defendants filed demurrers, essentially challenges to the lawsuit, said Cronin, adding that the key issues in them were rejected by the court. One of the defendants' arguments rejected was that the lawsuit was pre-empted by federal law.

Ultimately, there will be a trial, said Cronin, to take place sometime next year at the earliest. A hearing for a preliminary injunction, though, could be held this year on the legality of the provisions of the contract. Cronin indicated the CPhA plans to file a motion soon for a preliminary injunction that would halt the current pricing practices of the HMOs.