Topline
California is suing a group of pharmacy benefit managers and insulin manufacturers, including pharmaceutical giant Eli Lilly, for using “unlawful, unfair and deceptive” means to drive up the cost of the diabetes drug, Attorney General Rob Bonta announced on Thursday, the latest complaint seeking to control the “skyrocketing” insulin prices.
California Attorney General Rob Bonta filed a lawsuit against insulin makers, including Eli Lilly, … [+]
Key Facts
The lawsuit, filed Thursday in Los Angeles Superior Court, also lists drug makers Novo Nordisk and Sanofi, as well as pharmacy benefit management companies CVS Caremark, Express Scripts and OptumRx, according to a press release from Bonta’s office.
The complaint alleges the insulin makers—which produce more than 90% of the global supply of insulin—as well as the pharmacy benefit management companies that control the drugs covered on health insurance plans, have “leveraged their market power” in an effort to overcharge diabetes patients.
Bonta accused those companies of violating the state’s Unfair Competition Law by “unacceptably and artificially” inflating insulin costs, making it so expensive that “many diabetics struggle to afford it” even if it’s covered by their health insurance.
The suit specifically accuses the drug makers of “aggressively” increasing the list price of insulin “in lockstep with each other,” hurting both diabetes patients and competition.
It also claims pharmacy benefit managers are incentivized to boost the cost of insulin due to a system of “secret” rebates they receive from drugmakers in return for preferable placement in the management companies’ health insurance programs—those rebates are based on the list price of insulin.
Eli Lilly and CVS Caremark both denied the allegations in statement to Forbes, with Eli Lilly arguing the lawsuit “ignores that anyone is eligible to purchase their monthly prescription of Lilly insulin for $35 or less” and CVS Caremark saying “nothing in our agreements” prevents drug makers from lowering insulin prices.
Novo Nordisk refused to comment on the suit, while the other three defendants did not immediately respond to a Forbes inquiry for comment.
Key Background
California’s lawsuit follows similar ones filed in Minnesota, Mississippi and Kansas. One suit filed in Arkansas last May claimed the same six drug manufacturers and pharmacy benefit managers “unfairly and deceptively” drove up the cost of insulin, an essential drug relied on by diabetes patients to control their blood sugar levels. A 2021 Rand Corporation review found the average list price for insulin in the U.S. was $98.70, more than eight times the list price in Canada ($12). According to the complaint, insulin list prices have increased 700% over the past two decades.
Big Number
37 million. That’s how many Americans are living with diabetes, according to the American Diabetes Association, including 3 million adults in California alone—10% of its population, according to Bonta. Roughly 8.4 million Americans with diabetes rely on insulin to live.
Further Reading
Eli Lilly, Insulin Makers Sued by California Over Prices (Bloomberg)
California lawsuit accuses drugmakers, pharmacy benefit managers of insulin overcharging (Reuters)
Source: https://www.forbes.com/sites/brianbushard/2023/01/12/california-sues-eli-lilly-and-other-insulin-makers-for-driving-up-drug-cost/