DC 37 Drug-Price Lawsuit Produces $350M Settlement

District Council 37's Health and Security Plan is championing its part in a proposed $350 million settlement from health-care services company McKesson in a case spurred by the alleged artificial inflation of drug prices.

LILLIAN ROBERTS: Helped lower drug costs.

The lawsuit was originally filed in 2006, alleging that McKesson conspired with First DataBank, a drug publishing company, to fraudulently inflate the price of more than 400 prescription drugs by manipulating drug-pricing benchmarks.

Claimed Millions Overpaid

DC 37 was a leading plaintiff in the suit, claiming that McKesson's manipulation cost the union, as well as other third-party payers and consumers, millions of dollars in inflated drug costs and co-pays.

McKesson, the suit claimed, was trying to benefit retail clients who might otherwise have chosen to purchase wholesale prescriptions from McKesson's rivals in the highly competitive wholesale arena. McKesson changed the markup on brand-name drugs from 20 percent to 25, making retailers a significant profit.

The lawsuit was filed under the Racketeer Influenced and Corrupt Organizations (RICO) Act, and if the settlement is approved by a Federal judge, it will be one of the largest of its type, being distributed among third-party payers and consumers who paid cash or percentage co-pays.

"DC 37 is fighting a huge battle in trying to provide quality prescription drug coverage for our members," said DC 37 Executive Director Lillian Roberts in a statement. "It doesn't help when those within the industry make it more difficult by rigging the system. We felt we needed to challenge McKesson and the others involved on behalf of our membership. We are very gratified that the suit we filed with the other plaintiffs will bring economic relief to many hard-working Americans, and other third-party payers."