Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, September 3, 1994 TAG: 9409070026
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: Staff and wire reports
DATELINE: LENGTH: Medium
Although millions of Americans depend on their local drugstore or pharmacy as the sole supplier of prescription drugs, the price-discrimination suit notes there are competing outlets through which consumers can get prescriptions filled.
These competitors include mail-order pharmacies and outlets operated by health maintenance organizations and other health care providers known as HMO pharmacies or HMO outlets.
``Defendants' prices for prescription drugs they sell to mail-order pharmacies and HMO outlets are substantially and discriminatorily less than the prices that defendants charge for the same prescription drugs marketed to drugstores and pharmacies,'' alleges the suit filed in Richmond.
One of the plaintiffs, Wallace Cundiff of Cundiff Drug Store in Vinton, said some drug companies sell pharmaceuticals to large users at prices that are 20 percent to 40 percent cheaper than he can get at wholesale prices.
Laws already are on the books to prevent this, Cundiff said, but the government doesn't enforce them.
He said the suit is being handled through the Virginia Pharmaceutical Association.
Cundiff said Friday he joined the suit because he wants the price discrimination ended, and any monetary recovery is secondary to him. "The main thing I want is it stopped - now."
One area druggist who didn't join the suit is Ed Crockett, owner of Brambleton Drug and Williamson Road Drug.
He said attorneys pursuing the case are charging store owners a monthly fee of $250 per store and would take 30 percent to 50 percent of any recovery won by the suit. With two stores, he said, he would be paying $6,000 a year for a suit that is expected to last for several years. That did not seem like a good investment, Crockett said.
Owners of three other Roanoke Valley drugstores who were contacted for comment declined to discuss the suit. They were Tom Harvey of Lipes Pharmacy, Jim Green of Peters Creek Pharmacy, both in Roanoke, and Cameron Brooks of Brooks-Byrd Pharmacy Inc. in Salem.
Named as defendants in the U.S. District Court complaint are Abbott Laboratories, Cyanamid Co., American Home Products Corp., Eli Lilly & Co., Upjohn Co., Warner-Lambert Co., Bristol-Myers Squibb Co. and Burroughs Wellcome Co.
The lawsuit says the difference between the prices charged to ``favored purchasers'' and the price charged to drugstores and pharmacies ``is not justified by any difference in cost or otherwise.''
``Indeed,'' the lawsuit charges, ``the drugstore and pharmacy plaintiffs offer services to customers while the mail-order pharmacies and HMO outlets ride free.''
The lawsuit is similar to other unfair pricing complaints filed recently.
by CNB