ROANOKE TIMES 

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, October 15, 1993                   TAG: 9310150095
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-5   EDITION: METRO 
SOURCE: The Washington Post
DATELINE: NEW YORK                                LENGTH: Medium

DRUG-PRICE CONSPIRACY ALLEGED

Drugstore-chain executives Thursday accused major drug manufacturers of scalping consumers and neighborhood pharmacies with markups of up to 1,245 percent over prices charged mail-order businesses, hospitals and other special customers.

Representatives of Rite Aid Corp. and Revco D.S. Inc. made the unusually detailed allegations in announcing the filing of a federal lawsuit in Pennsylvania accusing seven large manufacturers of price discrimination and price fixing.

"This preferential treatment is costing American consumers hundreds of millions of dollars annually," said Alex Grass, chairman and chief executive of Rite Aid, which has 2,600 stores nationwide.

The manufacturers named in the suit: Pfizer Inc., SmithKline Beecham Pharmaceutical Co., Schering-Plough Corp., Searle Corp., Ciba-Geigy Corp., American Home Products Corp. (parent company of Wyeth-Ayerst Laboratories) and Glaxco Inc.

Most of the manufacturers said they could not comment on the suit until they had read it. Pfizer spokesman Brian McGlynn said, "We have not engaged in any price fixing of any kind."

Rick Sluder, spokesman for Glaxco, said the Federal Trade Commission has said in the past that the low prices his company offers mail-order and other special customers are legal and help stimulate competition. Even if retail drugstores combine to buy medicines in bulk, he said, there still may be higher costs to the manufacturer because of paperwork involving so many separate outlets.

An FTC official said the agency has expressed no public approval of manufacturer's drug-pricing systems "in recent memory."

At a news conference, Rite Aid and Revco alleged that Schering-Plough charged its special customers $2.03 for 100 capsules of K-Dur, a potassium supplement, while charging retail drugstores $27.31, a 1,245 percent increase. It also reported a 1,073 percent markup on Inderal, a heart medicine made by Wyeth; a 487 percent markup on Calan, a heart medicine made by Searle; and a 375 percent markup on Transderm-Nitro, a heart medicine by Ciba-Geigy.

Grass said pharmacists have fumed about such differences for years but until recently did not have enough information to file suit. 


 by CNB