THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, June 5, 1995 TAG: 9506030193
SECTION: BUSINESS WEEKLY PAGE: 16 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY TARA TROWER, BUSINESS WEEKLY
LENGTH: Medium: 55 lines
The small can be powerful when they team up in large numbers, which is exactly what Virginia's independent pharmacist have chosen to do. Almost 200 independently owned pharmacies from around the state have joined a nationwide law suit against three mail-order pharmacies and 27 drug manufacturers, including GlaxoWellcome Inc. of Research Triangle Park, N.C.
More than 4,000 pharmacists are demanding an opportunity to buy drugs under the same rules that apply to the other prescription handlers. And in a rare union of David and Goliath, the major drug store chains such as Revco and Farmco have joined forces with the independents in a separate suit with similar allegations.
``The survival of community pharmacy is at stake,'' said Wyatt Durette, lead counsel for the Virginia pharmacies.
The suit charges manufacturers with antitrust violations and illegal price discrimination. Many manufacturers commonly charge nursing homes, hospitals and health management programs substantially lower prices for drugs than those prices offered to community pharmacies, Durette said.
Manufacturers said the reason for these discounts - sometimes as much as 80 percent less than the suggested retail price - is that independents cannot buy in bulk like the other drug retailers.
But local druggists said that is not exactly the case. Many belong to buying groups and cooperatives, which negotiate bulk rates for the independent druggists.
``Even with the buying groups, we are still paying much higher prices than the HMOs or mail-order houses,'' said Boris Schwetz, owner of Arthur's Pharmacy in Norfolk.
``The biggest problem with manufacturers appears that they offer discounts on arbitrary classes of trade, instead of set standards,'' said Walter Norman, executive director of Virginia Pharmacy Network, a Richmond-based cooperative.
A spokesman from the Pharmaceutical Manufacturing Association declined to comment on the suit as did representatives for the manufacturers named in the suit.
Approximately 20 pharmacies, including two from Virginia, will have their price discrimination claims tried separately as test cases against five of the drug manufacturers: American Home Products Corp., Ciba-Geigy Corp., G.D. Searle and Co., GlaxoWellcome Inc. and SmithKline Beecham Corp. The remaining claims will be heard in Chicago in February. MEMO: [For a copy of a related story, see page 10 of the BUSINESS WEEKLY for
this date.]
by CNB