Unfair Competition

Drug Price Discrimination

Law 100.31, Wis. Stats., prohibits price discrimination by wholesalers that could result in an uneven playing field among retail pharmacies and a reduction of competition. The law provides that:

• "Every seller shall offer drugs… to every purchaser in this state, with all the rights and privileges accorded by the seller to the most favored purchaser, including purchase prices for similar volume purchases, rebates, free merchandise, samples and similar trade concessions."
  
• Wholesalers may grant discounts for volume purchases.

Penalties

Purchasers may bring a private action against the seller to recover treble damages for any losses suffered as the result of a violation of this law

• Department issued cease and desist orders.
  
• Civil forfeitures of $100 or $10,000.
  
• Court actions are generally commenced by the district attorney in the county where the alleged violation occurred.
  
• Enforcement Program Primarily enforced through investigations of randomly selected pharmaceutical manufacturers and wholesalers.
  
• Investigations include personal interviews, and on-site audits of financial documents, which include price lists, invoices, credit memos, and sales reports.
  
• Investigations often require in-depth price/volume analyses to establish the economic validity of any price discount.

In 1995, at the request of the Wisconsin Legislature, the Trade Practices Section issued a major report detailing the extent of discrimination in the wholesale pharmaceutical market. The report, entitled "Wholesale Pricing of Prescription Drugs in Wisconsin," provides important background information on industry structure, as well as a detailed analysis of the current pricing structure.

For further information contact Trade and Consumer Protection at 608-224-4989 or 608-224-4928.