July 13, 2010
Dow Jones Newswires
The California Supreme Court handed a legal victory to retail pharmacies that accused Pfizer Inc. (PFE) and other major drug makers of conspiring to set prices at artificially high levels.
The pharmacies' lawsuit alleges drug makers acted in concert to restrain importation into the U.S. of their lower-priced foreign drugs, and to restrict price competition from cheaper generic drugs, resulting in drug prices 50% to 400% higher than for the same drugs sold outside the U.S.
A trial court and appeals court had previously ruled in favor of the drug makers, finding that pharmacies had passed on the alleged overcharges to consumers, and thus sustained no damages.
But in a ruling Monday, the California Supreme Court decided that drug makers couldn't use this defense and remanded the suit to lower court for further proceedings. The higher court essentially concluded that the retail pharmacies would still be able to argue they suffered damages even if they passed along manufacturers' alleged overcharges.
The pharmacies that filed the suit are largely independent. An attorney representing them couldn't immediately be reached.
In addition to Pfizer, other defendants in the suit include Merck & Co. (MRK) and GlaxoSmithKline PLC (GSK). An attorney who argued the drug makers' case in the Supreme Court couldn't immediately be reached. Representatives of Pfizer, Merck and Glaxo couldn't immediately be reached.
-By Peter Loftus, Dow Jones Newswires; +1-215-656-8289; peter.loftus@ dowjones.com