PHARMACEUTICALS PRICE SUIT IS CERTIFIED AS CLASS ACTION

JANICE ZOELLER

WASHINGTON -- Retail pharmacies won a procedural victory last month when a lawsuit filed on their behalf against major pharmaceutical manufacturers and wholesalers over pricing practices was certified as a class action suit.

Michael Freed, an attorney with Much, Shelist, Freed, Denenberg & Ament, Chicago, co-lead counsel for the litigation, along with lawyers for other plaintiffs in related lawsuits, spoke about the pending litigation, filed by 60,000 pharmacies, at a news conference held here Nov. 30.

A trial date of Feb. 5, 1996 has been set for the class action suit, which names 25 pharmaceutical manufacturers and seven drug wholesalers as defendants. The retail pharmacies in this case allege that the defendants violated the federal Sherman Act, which prohibits price fixing, by conspiring to maintain high and ever-increasing prices to community pharmacies.

Judge Charles Kocoras of U.S. District Court in Chicago ruled the suit could proceed as a class action on behalf of all community pharmacies that had purchased brand-name prescription drugs from any defendant manufacturer or wholesaler at any time since Oct. 15, 1989.

"We would want to see change in the industry," in how pharmaceuticals are priced to retail pharmacies, said Freed. He added the suit also seeks damages for overpayment.

In addition to the class action suit, a number of other cases have been filed on behalf of individual pharmacies, including one filed Feb. 14 in Cincinnati, representing four major supermarket pharmacy operators: Kroger Co., Cincinnati; Safeway, Oakland, Calif.; Albertson's, Boise, Idaho, and Vons Cos., Arcadia, Calif. These cases allege price discrimination in violation of the federal Robinson-Patman Act, in addition to price fixing.

The supermarkets' suit contends that the drug companies sell their products to mail-order pharmacies, health maintenance organizations and hospital pharmacies at substantially lower prices than they charge supermarket pharmacies for similar quantities purchased. The price differences are not based on volume, they claim, but are instead based on class-of-trade distinctions.

The cases brought by individual pharmacy operators "will attempt to prove that there is a common understanding [among pharmaceutical manufacturers] to segment the market and maintain separation," said William Wentz, of Fewkes & Wentz, Oak Brook, Ill., attorney for the Pharmacy Freedom Fund, which represents independent pharmacies in one such suit.

All the cases filed under both federal statutes have been consolidated in Chicago for the purposes of discovery and obtaining depositions. The cases are expected to remain in Chicago until at least September. At that time, the suit filed by the supermarket operators may go back to Cincinnati, where it was originally filed, for trial, said Freed.

The conference at the National Press Club was sponsored by the National Association of Chain Drug Stores and the National Association of Retail Druggists. NARD's John Rector, senior vice president for government affairs and general counsel, and Robert Waspe, senior vice president for public policy and general counsel, NACDS, also addressed the conference.