Pharmacies Accuse Large Drug Makers of Price Fixing : Court: Lawsuits claim community drugstores pay more. Manufacturers deny wrongdoing.

Community pharmacies, banding together to fight what they describe as price gouging, filed two class-action lawsuits Wednesday accusing major drug manufacturers and distributors of charging them drastically higher prices than those charged to hospitals, HMOs and mail-order houses.

Filed in federal court in San Francisco, the suits--together with three state actions filed last week--accuse at least eight manufacturers and distributors of wide-scale price discrimination.

The pharmacies charge that the big firms--which include drug wholesalers Bergen Brunswig Corp. of Orange and McKesson Corp. of San Francisco--are violating state and federal antitrust laws and threaten to bankrupt 30,000 local druggists across the nation, as well as smaller chain stores.

Spokespersons for the companies named in the lawsuits denied any wrongdoing. In a typical comment, Bergen Brunswig spokeswoman Karen Wiley said the charges are without merit and that the company intends to defend itself vigorously.

The other defendants include drug manufacturers Rhone-Poulenc Rorer, Bristol-Meyers Squibb, Forest Pharmaceutical and Schering-Plough.

One of the suits filed Wednesday aims to block the planned $6-billion merger of drug maker Merck & Co. and Medco Container Services Inc., the nation’s largest mail-order provider of prescription drugs.

The pharmacies charge that the merger would perpetuate price discrimination and result in price fixing, said former San Francisco Mayor Joseph L. Alioto, one of the pharmacies’ lawyers.

The suits contain lists of prices that manufacturers allegedly charge various groups of retailers for specific drugs. Medco pays $2.58 for a common inhaler used to treat asthma, the suits say, while community pharmacies pay $33.61.

“These price differences are rampant and unjustifiable,” Alioto said. “This happens with the 50 most popular drugs sold. The result is that the consumer is being gouged.”

The lawsuits come as the Clinton Administration gears up to push its health care reform package through Congress. The Administration plan is expected to include limits on drug companies’ ability to raise prices.

The Pharmaceutical Manufacturers Assn., a trade organization in Washington that includes several of the defendants, issued a statement saying that offering lower prices to volume purchasers is a standard business practice.

But Frederick S. Mayer, president of the Pharmacy Defense Fund--a Corte Madera, Calif.-based trade group of independent pharmacists--says price discrepancies are driving community pharmacies out of business.

Mayer said the number of independent pharmacies in California has declined over the last 15 years to 2,612 from 4,800, with neighborhood pharmacies disappearing at a rate of 1% a month.

“This is do-or-die time,” said Mayer, who owns a pharmacy in Sausalito. “Unless the two-tier pricing is ended, the neighborhood pharmacy is ended as we know it today.”

Independent pharmacies in California formed a purchasing group to buy drugs in bulk, Mayer said, but found they could not get big discounts from drug makers.

The Medco-Merck merger was attacked on a second front Wednesday. In two lawsuits filed in Delaware courts, a shareholder group contends that Medco directors violated their fiduciary duties, paid improper fees to certain executives and structured the merger proposal unfairly.

Medco said both sets of lawsuits are without merit.

Times staff writer Chris Woodyard contributed to this report.