DRUG MAKERS SETTLE PRICE DISPARITY SUIT

Nineteen drug companies agreed Friday to pay $176 million to settle a
class-action lawsuit in San Francisco alleging they gouged the public
for medicines sold through independent pharmacies.

The settlement calls for the companies to provide $148 million worth
of brand-name drugs to 300 non-profit medical clinics in the state
that dispense drugs to the poor.

The companies, which include Merck & Co., were accused of charging
different prices to drugstores than to HMOs that buy and distribute
drugs on a large scale.

Independent druggists have contended they paid up to $28.90 for 100
tablets of a synthetic thyroid drug while HMOs paid as little as $1.43.

Under the settlement, given preliminary court approval Thursday, the
companies could pay as much as $27 million in fees to attorneys for
the plaintiffs and $1.6 million to administer the three-year program.