San Francisco sues McKesson over AWP

May 28, 2008

The City of San Francisco is suing McKesson in federal court, alleging that the wholesaler conspired to inflate the gap between wholesale acquisition costs and average wholesale prices.

The city of San Francisco is alleging McKesson illegally conspired to fix drug pricing through manipulations of the average wholesale price. In a complaint filed in federal court in Boston, the city attorney Dennis Herrera accused the wholesaler of inflating the difference between the wholesale acquisition cost and the average wholesale price of more than 400 medications. The suit is closely related to another suit over AWP inflation filed against First DataBank and McKesson in the same courtroom. Earlier this year the judge in that case refused to approve a proposed settlement with First DataBank in that case that would have ended the reporting of AWP data. In a statement, McKesson promised to vigorously defend itself. “As with the pending litigation in Boston filed against McKesson and First DataBank, we believe the allegations lack merit and intend to vigorously defend ourselves,” the company stated. “As we have previously stated, McKesson does not set AWPs and does not set the drug prices paid by consumers or health plans.”
Some industry insiders hope that community pharmacies won’t be hurt if the San Francisco suit prevails, since many contracts are based on AWP.

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