Pharmacists sue over franchise agreement
Medicine Shoppe and Medicap pharmacists in seven states sued Cardinal Health in federal court Tuesday, alleging the health care products distributor failed to make good on promises it made when it asked them to switch to a new franchise agreement.
The lawsuit filed in U.S. District Court in Columbus, Ohio, says franchise holders who agreed to the change offered in March 2009 are paying lower fees than others, while all are getting fewer supports and services from the Cardinal-owned Medicine Shoppe International Inc. and Medicap Pharmacies Inc. It says many who have the lower fees were charged "grossly unfair" penalties to switch from their old agreements.
Pharmacists want a return of penalties paid and for all franchisees to be charged the lower fees or be allowed to cancel their franchise agreements, said St free 3-in-1 credit report. Louis attorney David Harris, who represents the pharmacists. Plaintiffs include Medicine Shoppe franchisees in California, South Dakota and Kansas and Medicap franchisees in Pennsylvania, Idaho, Iowa and North Carolina.
Harris said the suit seeks class-action status and could include more than 600 franchises that account for $1 billion in drug sales for Cardinal. Most signed 20-year agreements.
Medicine Shoppe, which Cardinal acquired in 1995, had been based in Earth City but the pharmacy chain moved its headquarters to Dublin, Ohio, last year.