California Lawsuit Accuses Six Companies Of Driving Up Insulin Costs

January 24, 2023

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Source: Benefits PRO, by Alan Goforth

California is suing several companies that dominate the U.S. insulin market, accusing them of driving up prices.

“We’re going to level the playing field and make this lifesaving drug more affordable for all who need it by putting an end to big pharma’s big profit scheme,” Attorney General Rob Bonta says after filing the lawsuit last week. “These six companies are complicit in aggressively hiking the list price of insulin, at the expense of patients.”

The 47-page civil complaint alleges that three pharmaceutical companies that control the insulin market – Eli Lilly and Co., Sanofi and Novo Nordisk — are violating California law by unfairly and illegally driving up the cost of the drug. It also targets three pharmacy benefit managers — CVS Caremark, Express Scripts and OptumRx.

Bonta argues in the lawsuit that prices have skyrocketed and that some patients have been forced to ration their medicine or forgo buying insulin altogether. A vial of insulin that cost $25 two decades ago now costs about $300.

A 2021 U.S. Senate investigation found that the price of a long-acting insulin pen made by Novo Nordisk jumped 52% from 2014 to 2019 and that the price of a rapid-acting pen from Sanofi shot up about 70%. From 2013 to 2017, Eli Lilly had a 64% increase on a rapid-acting pen. The investigation implicated drug manufacturers and pharmacy benefit managers in the increases, saying they perpetuated artificially high insulin prices.

Eli Lilly spokesperson Daphne Dorsey says the company is “disappointed by the California attorney general’s false allegations,” arguing that the average monthly out-of-pocket cost of insulin has fallen 44% over the past five years, and the drug is available to anyone “for $35 or less.”

California follows other states, including ArkansasKansas and Illinois, in going after insulin companies and pharmaceutical middlemen. However, California is taking an aggressive approach by charging the companies with violating the state’s Unfair Competition Law, which could carry significant civil penalties and potentially lead to millions of dollars in restitution for Californians. If the state prevails in court, the cost of insulin could be “massively decreased” because the companies would no longer be allowed to spike prices, Bonta says.

Mike DeAngelis, a spokesperson for CVS, says it would vigorously defend itself and that pharmaceutical companies alone set list prices. “Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products, and we would welcome such action,” he says. “Allegations that we play any role in determining the prices charged by manufacturers are false.”

Edwin Park, a California-based research professor with Georgetown University’s Center for Children and Families, says California’s push to enter the generic drug business, while also suing the pharmaceutical industry, ultimately could lead to lower patient costs at the pharmacy counter. “It can put downward pressure on list prices,” he says. “And that can lead to lower out-of-pocket costs.”

 

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