A union benefits fund has initiated a class-action suit against drugstore chain Walgreen (NYSE:WAG) and generic drug manufacturer Par Pharmaceutical (NYSE:PRX), saying the companies carried out “at least two widespread schemes to overcharge” for generic drugs.
According to WSJ, the lawsuit alleges that Walgreen and Par partnered to manufacture and market generic versions of antacid Zantac and antidepressant Prozac, then “systematically and unlawfully filled its customers’ prescriptions with Par’s more expensive products, rather than the inexpensive dosage forms that were prescribed by physicians.” Customers were charged two to four times more than they would have been if the prescriptions had been filled as intended by the doctors.
The Union Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund in the Northern District Court of Illinois filed the suit. The union benefits fund is seeking a jury trial. Walgreen and Par have not yet commented on the allegations.
Here’s how these stocks reacted to the news:
Walgreen Co. (NYSE:WAG): WAG shares recently traded at $32.63, down $0.64, or 1.92%. They have traded in a 52-week range of $30.34 to $47.11. Volume today was 6,883,527 shares versus a 3-month average volume of 8,626,890 shares. The company’s trailing P/E is 11.04, while trailing earnings are $2.96 per share.
Par Pharmaceutical Companies Inc. (NYSE:PRX): PRX shares recently traded at $36.29, up $0.49, or 1.37%. They have traded in a 52-week range of $24.85 to $36.87. Volume today was 334,933 shares versus a 3-month average volume of 405,262 shares. The company’s trailing earnings are $-1.69 per share.
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