Drug stores: McGraw's 'hunch' is off
CHARLESTON, W.Va. (Legal Newsline) - Prescription drug store chains sued by West Virginia Attorney General Darrell McGraw are alleging that his lawsuit is based on nothing more than "an erroneous hunch."
Six defendants made the comment in a reply in support of their motion to dismiss the suit, filed in July against Wal-Mart, Target, Kmart, Kroger, Walgreen and CVS. They also note problems for the plaintiffs in a Minnesota lawsuit making the same allegations of overcharging for generic drugs.
"For all but two of the defendants, the Attorney General admits he has alleged no facts and believes these defendants must have violated the law solely because they have "a substantial number of pharmacies in West Virginia," the reply says.
"As for the other defendants, the only 'facts' the Attorney General points to are a few statements in two corporate reports and one media article indicating that, in general, a larger gross profit or margin is earned on generics than on branded pharmaceuticals.
"However, the referenced statements neither relate specifically to any drugs dispensed in West Virginia, nor to only transactions where a generic product was substituted in lieu of the prescribed brand."
The reply says no facts have been alleged against Kmart, Target, Kroger or Wal-Mart.
The private lawyers hired by McGraw to pursue the case also do not explain how higher profits on generic drug sales violate state law, the reply says. McGraw's attorneys say the savings must be passed on to consumers.
In the Minnesota case, U.S. District Judge James Rosenbaum dismissed the original complaint filed by three law firms - Varnum LLP of Michigan; Felhaber, Larson, Fenlon & Vogt of Minnesota; and Bailey & Glasser of West Virginia.
Bailey & Glasser is working with DiTrapano Barrett & DiPiero on McGraw's case.The two firms have contributed more than $60,000 to McGraw's campaign fund over the years, including $11,800 for his 2008 race against Republican Dan Greear.
Attorneys in the Minnesota case were allowed to file an amended complaint, and did so Wednesday.
Instead of filing in their suit in Charleston, attorneys for McGraw filed their suit in Boone County. Only one of the defendants operates a store there. The case was removed in September.
The dispension of prescription drugs is not an area covered by the state's Consumer Credit and Protection Act, but by the Pharmacist Law, the reply says. It adds that the Board of Pharmacy is responsible for enforcing that law.
"In sum, whether because of pleading deficiencies or as a matter of substantive legal defects, the complaint must be dismissed with prejudice in its entirety," the reply says.
McGraw's response had said the defendants are trying to raise every procedural and techical hurdle they possibly can to prevent the State from conducting discovery.
"Common sense and caselaw, including cases from this court, dictate that the State is not required at this stage to prove its case by providing all of the specific facts conclusively establishing liability, but need only plead facts that give the defendants fair notie of the claim and the grounds upon which they rest," McGraw's attorneys wrote Nov. 9.
"The State has met this burden with respect to all claims, and is entitled to pursue discovery so it can prove its allegations."
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.