Bad news came to McKesson Corp. yesterday in the form of a ruling by U.S. District Judge Patti B. Saris. Judge Saris certified a number of 2005 suits by the New England Carpenters Health Benefits Fund as class action, and allowed them to be tried under U.S. racketeering law, according to a report by Bloomberg news.
The suits allege that McKesson and First DataBank, a subsidiary of Hearst Corporation that specializes in medical databases, conspired to boost the profits pharmacies make on medicine sales. The plaintiffs argue that rather than profiting directly from the scheme, distributors manipulated pricing to gain favor with retailers such as Rite Aid Corp. and Wal-Mart and to increase its market share, according to Bloomberg.
Since the Racketeer Influenced and Corrupt Organizations Act triples the damages awarded in racketeering cases, and because the plaintiffs claim the alleged backroom deal cost consumers $5 billion, the total damages that McKesson Corp faces is $15 billion. Even as the largest drug wholesaler in the U.S., that’s a number McKesson can’t ignore. According to experts, it’s almost a guarantee that the company will settle the case.


