Pharmacies Gouge on Generics, Class Claims

MINNEAPOLIS (CN) - CVS, Walgreen's, Wal-Mart and other major pharmacies overcharge customers for generic drugs, a class action claims in Hennepin County Court. Minnesota law requires pharmacies to pass along the discounts they receive on generics to consumers, but the class claims the pharmacies "routinely violate this law and ... see the lower acquisition cost of generic drugs as an opportunity to generate higher profit for themselves."

A "pharmacy in Minnesota cannot make a greater profit on the sale of a generic prescription drug than it does on the brand-name version of the drug," the class claims. But the pharmacies do it. Both CVS and Walgreen's told to the Wall Street Journal in 2007 that they made more from selling generics than brand-name drugs, according to the complaint.

The named plaintiffs are two employee benefit plans, Graphic Communications Local 1B Health & Welfare Fund A and the Twin Cities Bakery Drivers Health and Welfare Fund, which provide health and prescription drug benefits to more than 2,500 Minnesotans.

Defendants include Target, Kmart, Sears Roebuck, Snyder's Drug Stores, Caremark, and Coborn's.

The defendants operate nearly 400 pharmacies in Minnesota. The class is represented by David Hashmall with Felhaber, Larson & Fenlon.

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