San Francisco sues massive drug wholesaler

Pub date May 20, 2008
WriterG.W. Schulz
SectionPolitics Blog


Close readers of the Bay Guardian might remember that back in October of 2006, we caught up with a story involving the McKesson Corp., one of the world’s largest wholesalers of prescription drugs based in San Francisco, and a little-known publishing house called First DataBank, located in San Bruno and one of the few publishers of prescription drug prices in the United States.

First DataBank is owned the Hearst Corp., parent of the San Francisco Chronicle. We followed up with a few more versions of the story, but beyond the Wall Street Journal, which broke the first major story about the relationship between the companies as a lawsuit on the East Coast alleging a conspiracy to artificially inflate drug prices winded its way through the courts, almost no one has bothered to report on the subject.

It took the Chronicle’s business section weeks after our stories ran to publish anything on the suit even though the Journal led with the story on its front page when it first went public.

Probably within hours from now, however, you should expect to see more about McKesson and First DataBank at with a new attitude from the Chronicle about the two companies.

That’s because San Francisco’s city attorney announced today that we’ll be the first government entity to sue McKesson for the alleged price inflations in a federal court in Boston where the other suits were filed. The stories we wrote focused on labor unions there that extended drug benefits to their rank-and-file and whose attorneys obtained internal communications from McKesson and First DataBank employees that purportedly showed how the companies celebrated the success of the alleged price-fixing scheme. In San Francisco’s suit, First DataBank is not listed as a defendant, but the city attorney describes the company as “an unnamed co-conspirator.”

Despite McKesson’s global reach and headquarters being located here in the city, we’ve always been blown away that the local press has spent so little time reporting on them. We’ll post more info as we gather it.