The California Supreme Court has overturned a lower court decision that dismissed a price-fixing lawsuit brought by a group of pharmacies. They had charged the largest drugmakers agreed to set artificially high prices, and acted in concert to restrain reimportation of their lower-priced foreign drugs into the US and restrict price competition from generics. As a result, the drugmakers were able to maintain prices 50 to 400 percent higher than for the same drugs sold outside the US.
The drugmakers - which included Abbott Labs; AstraZeneca; Novartis; Allergan; Boehringer Ingelheim; Eli Lilly; Johnson & Johnson; Janssen Pharmaceutica; Ortho McNeil; Ortho Biotech; GlaxoSmithKline; Pfizer; Hoffman-LaRoche; Aventis Pharmaceuticals; Amgen; Purdue Pharma; Merck; Bristol-Myers-Squibb, and Wyeth - a so-called “pass-on” defense. In other words, they argued they weren't liable for any illegal pricing because the pharmacies had passed the alleged overcharge to consumers and, therefore, did not suffer any harm or damages.
But the court disagreed: "That a purchaser passes on an overcharge does not mean it lacks for injury or damages," according to the ruling (which you can read here).
Two years ago, a California appeals court upheld dismissal of a 2004 lawsuit against the drugmakers that alleged they conspired to inflate prices in order to keep cheaper meds from Canada out of the US, leading drugstores to pay more then they should have. The pharmacies claimed they paid four times more than retailers in other countries, and appealed the ruling (back story).