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A federal judge in Massachusetts has certified as a national class action a suit by thousands of consumers against McKesson Corp. in an alleged racketeering scheme to jack up the average wholesale price of prescription drugs. The suit began in 2005 against McKesson, one of the nation’s largest pharmaceutical wholesalers, and First Databank, Inc., a drug-pricing publisher, alleging a conspiracy to add 5% to the average wholesale prices of 400 drugs published in First Databank’s drug pricing guide. U.S. District Judge Patti Saris certified the class in a 23-page order March 19 in New England Carpenters Health Benefits Fund v. First Databank Inc., 05-11148PBS. Saris certified two classes. One is consumer purchases, including anyone who made a co-payment for prescription medication from Aug. 1, 2001 through May 15, 2005. And a second one is all third-party payers who made reimbursement payments based on inflated wholesale prices. Databank agreed to settle the suit in October 2006, but McKesson has continued to challenge the allegations, according to a statement by Hagens Berman Sobol Shapiro, the Seattle-based firm that filed the suit. The lawsuit alleges that McKesson and Databank engaged in a secret scheme to increase the spread between what pharmacies pay for drugs and what they are reimbursed by clients for more than 400 drugs such as Lipitor, Prozac, Zocor and Vioxx. The scheme would result in higher profits for retail pharmacies based on the spread between the purchases of drugs on the basis of the lower Wholesale Acquisition Cost, but get reimbursed based on the higher Average Wholesale Price, according to the suit. The extent of the alleged damage to third party payers was hotly disputed, according to Saris’ order. McKesson has vigorously argued that third party payers negotiate drug-pricing discounts for their networks and thus may have mitigated any damage caused by alleged price inflation, Saris wrote. McKesson did not immediately respond to a request for comment.

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