US FTC Probes 22 Drug Firms' Pricing

31 March 1996

The US Federal Trade Commission has ordered an investigation into 22 drug manufacturers, to discover whether they engaged in "unlawful concerted activities to raise, fix, maintain or stabilize the prices" of drugs.

The probe follows the settlement of a class-action lawsuit in february by independent pharmacies, claiming that 13 drug firms had conspired to overcharge them in order to cover the massive discounts offered to managed care organizations and mail-order pharmacy businesses (Marketletters passim). The companies under investigation include American Home Products, Glaxo Wellcome, Lilly, Johnson & Johnson, Pfizer, Sandoz, Schering-Plough, SmithKline Beecham and Warner-Lambert.

Local reports note that the investigation is less concerned with price discounting than with the allegations that the companies conspired to manipulate prices, thus contravening federal antitrust legislation.

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