State of Arizona files complaint against McKesson Corporation for inflating prescription drug prices

PHOENIX - The State of Arizona filed a lawsuit against the drug wholesaler McKesson Corporation after they allegedly artificially inflated prices of more than 400 brand-name prescription drugs.

According to Attorney General Tom Horne, McKesson Corporation, a company that controls around one-third of the nation's wholesale drug market, violated Arizona's Consumer Fraud Act under these allegations.

The complaint alleges that McKesson executives created the scheme to raise the price of the wholesale drugs in 2000. These price alterations caused Arizona businesses and consumers to pay more for the drugs at pharmacies like Albertson's, Costco, Safeway, Target, Wal-Mart and Walgreens.

"The prices of nearly all brand-name prescription drugs were inflated, including several of the most popular drugs on the market," said Horne in a news release.

Among the drugs inflated were Allegra, Celebrex, Flonase, Lipitor, Nexium and Valium.

"For example, in 2004 under this scheme, an additional McKesson markup of 5 percent for the drug Nexium could result in an added $100 million in profit based on $4 billion in sales of Nexium that year. Since this claim alleges markup irregularities on more than 400 drugs over multiple years, the consumer damages were enormous. We will ask the court to impose a penalty that recognizes the scope of the scheme," said Horne.

The complaint is seeking up to $10,000 from McKesson for each Consumer Fraud Act violation, according to a news release. Restitution is also being sought.