US Drug Majors Agree To Shift In Pharmacies Battle

Several of the USA's pharmaceutical majors have announced agreement to abandon a dual pricing strategy which has been attacked by pharmacists nationwide (Marketletters passim). Retail pharmacists contend that the strategy puts them at a competitive disadvantage compared with pharmacies in managed care schemes.

Three drug companies have said the project will be abandoned in an attempt to revive a proposed $408.9 million settlement of an anti-trust lawsuit being brought by the pharmacies. Jim Kappel, a spokesman for Eli Lilly, said that as part of the agreement "we will not refuse to grant discounts with respect to brand-name prescription drugs" to retail pharmacies solely on the basis of their status as retailers. However, Mr Kappel declined to provide further details.

The problem arose in 1994 when a group of independent pharmacies sued 24 drugmakers and six wholesalers, claiming that they had conspired to deny price discounts on drugs sold to retail pharmacies in violation of antitrust law. A settlement was reached in February this year in which the 40,000 or so pharmacies were to get precisely $408.9 million, but this agreement was rejected in April by US District Court judge Charles Kocoras. He said the amount was fair but the settlement did nothing to address the pharmacies' grievance. The manufacturers have now changed their position.