A US District Court judge has certified a nationwide class-action lawsuit against the big wholesaler, and the law firm representing consumers and third-party payers that filed the suit is predicting damages could reach big numbers - more than $5 billion.

The lawsuit, which was filed two years ago, claims McKesson engaged in a scheme to fraudulently inflate the price of more than 400 drugs, including many widely used meds such Lipitor, Zocor and Vioxx. The ruling allows the case to move forward on behalf of two classes: consumer purchasers, which includes anyone who made a co-payment for prescription medication from August 1, 2001 through May 15, 2005, and third-party payers that made a payment or reimbursement based on an allegedly inflated average wholesale price, or AWP, during the class period. Here is the ruling.

The original lawsuit claims McKesson and First DataBank, which publishes pricing data, reached a secret deal on how the AWP would be set for brand-name drugs, and in doing so, raised the spread between the published AWP and the actual acquisition costs from 20 to 25 percent in an effort to increase profits, according to Hagens Berman Sobol Shapiro, the law firm that filed the suit. We have not yet received a reply from a McKesson spokesperson.

According to documents cited in the court’s order McKesson communicated the price increase to First Databank, who published the info, even amid questions by manufacturers who recognized the impact to consumers and third-party payers. McKesson did so to raise the profits for its large clients like Rite Aid and Walgreen’s, the lawsuit alleges.

In her ruling, US District Court Judge Patti Saris cited internal documents where McKesson claimed that by the end of 2004 nearly “99%” of all brand-name drugs were set at a higher price as a result of the scheme. The order also noted that pharmacy benefit managers benefited and cited an Express Scripts document where an exec cautioned to “put a lid on” the financial benefit the PBM was receiving.

Last August, Saris initially certified the class of third-party payers, but not for damages, which her latest ruling includes. McKesson argued that third-party payers each have a unique contract with its PBMs, which allows for negotiation in drug pricing, the law firm notes. The lawsuit claims McKesson violated the federal Racketeer Influenced and Corrupt Organizations (RICO) act, and if found guilty, could be forced to pay treble damages under the RICO statute as well as under various consumer protection statutes.