Six major companies that dominate the US insulin market are being sued by Californian Attorney-General Rob Bonta, who believes they are violating the law by unfairly and illegally pushing up the price of the drug.
The legal action has reinforced the state’s assault on a hugely profitable industry for artificially inflating prices and making the indispensable drug less accessible for diabetes patients, reports Kaiser Health News.
The 47-page civil complaint, which accuses three pharmaceutical companies that control the insulin market – Eli Lilly and Co, Sanofi and Novo Nordisk – of violating California law by inflating the drug’s cost, also targets three distribution middlemen, known as pharmacy benefit managers: CVS Caremark, Express Scripts and OptumRx.
“We’re going to make this lifesaving drug more affordable for all who need it, by ending Big Pharma’s big profit scheme,” Bonta said after filing the lawsuit in an LA court last Thursday. “These companies are complicit in aggressively hiking the list price of insulin, at the expense of patients.”
In the lawsuit, Bonta argued that prices have skyrocketed and that some patients have been forced to ration their medicine or forgo buying insulin altogether. The AG said a vial of insulin had cost $25 a couple of decades ago but now costs about $300.
A 2021 US 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.
“California diabetics who require insulin to survive and who are exposed to insulin’s full price… pay thousands of dollars per year for insulin,” said the complaint.
Eli Lilly spokesperson Daphne Dorsey said the company was “disappointed by the AG’s false allegations”, arguing that the average monthly out-of-pocket cost of insulin has fallen 44% over the past five years, and that the drug is available to anyone “for $35 or less.”.
OptumRx, a division of UnitedHealthcare, said it welcomed the opportunity to show “how we work every day to provide people with access to affordable drugs, including insulin”.
California follows other states, including Arkansas, Kansas and Illinois, in targeting insulin companies and pharmaceutical middlemen, but Bonta said California was 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 said.
Bonta joins fellow Democratic leaders in targeting the pharmaceutical industry. Another, Governor Gavin Newsom, has launched an ambitious plan to put the nation’s most populous state in the business of making its own brand of insulin as a way to bring down prices for the roughly 3.2m diabetic Californians who rely on the drug.
By launching an aggressive attack against the pharmaceutical industry, California is also wading into a popular political fight. Many Americans are outraged at drug costs while manufacturers blame pharmacy middlemen and health insurers. Meanwhile, the middlemen point the finger back at drugmakers.
There isn’t much transparency in how drug prices are set in the US. Manufacturers are predominantly to blame for the high costs, because they set the list prices. A growing body of research also indicates that the middlemen are a prime driver of high patient drug costs. To lower prices, it’s critical to target the entire supply chain, experts say.
“The list price has definitely gone up,” said Dr Neeraj Sood, a professor of health policy, medicine, and business at the University of Southern California who has studied drivers of high insulin costs. “But over time a larger share of the money is going to the middlemen rather than the manufacturers.”
KHN article – California Attorney General Sues Drugmakers Over Inflated Insulin Prices (Open access)
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