Arizona AG files lawsuit against drug wholesaler

Attorney General Tom Horne (Photo by Ryan Cook/RJ Cook Photography)

Arizona is suing the nation’s largest drug wholesaler, claiming the company violated state consumer protection laws by artificially inflating the prices of hundreds of brand-name prescription drugs.

Attorney General Tom Horne announced the lawsuit against McKesson Corp. on Wednesday. The complaint was filed Friday in Maricopa County Superior Court.

The drugs that were alleged to have been marked up included Allegra, Celebrex, Coumadin, Flonase, Lipitor and Valium.

Horne argues that the price hikes cost consumers millions of dollars. He used the example of a 5 percent markup of the drug Nexium in 2004, saying it could result in $100 million in additional profit based on $4 billion in sales of the anti-acid-reflux drug that year.

“Since this claim alleges markup irregularities on more than 400 drugs over multiple years, the consumer damages were enormous,” Horne said in a statement. “We will ask the court to impose a penalty that recognizes the scope of the scheme.”

The San Francisco-based company did not immediately return a phone message seeking comment.

McKesson distributes pharmaceuticals to retailers including Albertson’s, Costco, Safeway, Target, Wal-Mart and Walgreens.

Arizona’s lawsuit alleges that McKesson raised the spread between the published average wholesale price and the actual acquisition costs to increase profits for its pharmacy customers. The lawsuit contends those prices were passed along to third-party payers and consumers.

The lawsuit seeks restitution as well as civil penalties of up to $10,000 for each violation of the state’s Consumer Fraud Act.