State Sues Over Fraudulent Insulin Prices
Pressure is building—we can only take so much. Every protest, every lawsuit, and every investigation brings us closer to the day the lid will blow off the “insulin racket.” We hope.
Minnesota is moving in. The attorney general in the state has filed a lawsuit against Eli Lilly, Sanofi, and Novo Nordisk, the three companies that control most of the insulin available in the United States. Minnesota accuses the drugmakers of artificially raising the list prices on their insulin products while offering rebates to pharmacy benefit managers (PBMs).
Attorney General Lori Swanson filed the lawsuit in federal court on October 16, 2018. Insulin prices have more than tripled since 2002, and high prices are forcing those with insulin-dependent diabetes to make dangerous decisions. Those with type 1 diabetes will die without insulin injections, and those with insulin-dependent type 2 will suffer serious health consequences without it.
The three pharmaceutical companies implicated in the lawsuit are accused of fraudulently setting list prices and then offering reduced rates to PBMs. PBMs work to reduce prescription drug costs for the employers and healthcare plans they represent, and they negotiate with drug companies to get lower prices. The PBM decides which brand of insulin will be on their plan’s preferred drug list, which means that brand will be used more often. If drug companies artificially inflate list prices, as they are being accused of, they can offer lower prices to PBMs while still maximizing profits.
Fraudulently raising list prices to levels that don’t accurately reflect what insulin actually costs to make hurts those who are most vulnerable: everyone who can’t access the lower negotiated prices. These include people with high deductible healthcare plans, the uninsured, and senior citizens covered by Medicare.
While insulin may remain affordable for those with a good health insurance plan, those who aren’t in that camp have to find a way to make it through, and none of the options are good. Those who need insulin have been forced to pay exorbitant prices (some pay over $1,000 a month) or put their life at risk by rationing insulin. Some try to get insulin from outside sources, which may include breaking the law or using compromised insulin.
Attorney general Swanson summed it up perfectly: “Many people can’t afford the price hikes but can’t afford to stop taking the medication either.”
This is the first lawsuit filed by a state that specifically targets insulin pricing practices, but other actions and investigations are pending. Attorney generals in Washington, Minnesota, and New Mexico have issued civil investigative demands regarding the business relationships between insulin manufacturers and PBMs. According to CBS News, they appear to be investigating if manufacturers and middlemen (such as distributors and PBMs) have let prices soar in order to increase profits.
A class-action suit filed in January of 2017 in the US District Court for the District of Massachusetts accuses insulin manufacturers of exploiting the drug-pricing system in order to increase profits while leaving people with diabetes in the lurch.
“It’s time to break up the insulin racket,” said Steve Berman, the attorney representing the patients.
It’s no longer just figurative to say that people are dying over insulin prices. We’re losing people to a manageable disease, and we need answers. We hope the courts provide them soon.