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April 12, 1996 - Image 48

Resource type:
Text
Publication:
The Detroit Jewish News, 1996-04-12

Disclaimer: Computer generated plain text may have errors. Read more about this.

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Druggists' Lawsuit
Will Go To Trial

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ens of thousands of inde-
pendent ref-nil pharmacists,
many of them from Michi-
gan, just learned that their
price-fixing case against several
drug companies will proceed to
trial rather than settle outside of
court.
In the meantime, a handful of
state lawmakers have introduced
legislation that would end pric-
ing discrimination by drug com-
panies, and the Federal Trade
Commission just opened an in-
vestigation of charging practices
by drug companies.
Federal Judge Charles Koco-
ras of Chicago last week rejected
a $400 million settlement offer
by 16 of the 33 drug manufac-
turers named in the class-action
lawsuit.
Sixty local pharmacists in-
volved in the action hired the law
firm of Jaffe Raitt Heuer Weiss,
P.C., earlier this year to challenge
the settlement offer, said attor-
ney Julia Blakeslee. She recent-
ly traveled to Chicago to object to
the offer, as did many other at-
torneys who represent pharma-
cists all over the country.
The lawsuit, said Ms.
Blakeslee, relies on a 60-year-old
federal statute that prohibits dis-
criminatory pricing by drug man-
ufacturers. It alleges that drug
companies have conspired to fix
prices so that independent phar-

macists pay more for drugs. It
also accuses drug companies of
engaging in price discrimination.
Roughly 3,000 Michigan phar-
macists are plaintiffs in the law-
suit.
The settlement offer was "in-
adequate," she said, because it
wouldn't have begun to cover the
losses pharmacists have suffered
— the nearly 40,000 plaintiffs
would see about $5,000 to
$10,000 each — and worse, it
wouldn't have the effect of end-
ing the alleged discriminatory
pricing.
Independent retail pharma-
cists, from the corner druggist to
the grocery store pharmacist,
"pay the highest price possible"
for pharmaceuticals, Ms.
Blakeslee said.
Why that is so is a matter of
speculation, she said.
"Everybody has a suspicion
that drug companies want to get
their drugs into the marketplace
and are willing to give discounts
to people who can move their
products."
Health maintenance organi-
zations (HMOs), for example, will
pay for certain brands of phar-
maceuticals, in effect narrowing
competition, and are rewarded
with deep discounts, she said.
Judge Kocoras set a trial date
for May 7.

Honing In
On The Haredim

Marketing directors are taking note of the religious
community's major purchasing power.

RACHEL NEIMAN SPECIAL TO THE JEWISH NEWS

M

atza pizza, which was
this Passover's fast-food
biggie, isn't just a one-
hit wonder. According
to public relations man Zvi
Vilder, "This is part of a new phe-
nomenon. Kosher restaurants
have come to understand that
the religious community has very
few options when eating out and
decided to remain open during
Passover."
The motive isn't strictly hu-
manitarian. Mr. Vilder says Ital-
ian food chain Sbarro, which
ordinarily features a kosher
menu, expects its investment of
"tens of thousands of dollars" on
a Passover kashrut certificate to
be returned tenfold.

More and more companies are
courting the religious sector's
business, and for good reason.
Studies conducted by IsraCard,
together with a statistician from
Bar-Ilan University, put the
number of haredi households at
75,000, or some 412,000 individ-
uals, three-quarters of whom are
children.
The rise in spending has been
gradual rather than dramatic.
Over the past decade, the mar-
ket has continuously developed
along with product-improving
technologies. A variety of store-
bought products have hit the
shelves and promise quality
without sacrificing kashrut stan-
dards.

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