January 31, 2017

Major Insulin Makers Accused of Price Fixing

By the C|C Whistleblower Lawyer Team

As reported in the New York Times, a group of diabetes patients filed suit yesterday against the three dominant providers of insulin, alleging they systematically raised prices through a price-fixing scheme that imposed on patients “crushing out-of-pocket expenses.”  The lawsuit — brought against Sanofi, Novo Nordisk and Eli Lilly — comes only a few months after Senator Bernie Sanders (I-Vt.) and Representative Elijah E. Cummings (D-Md.) called for a federal investigation into “possible collusion” on insulin prices.

The lawsuit, filed in Massachusetts federal court, claims the three companies intentionally raised the list prices on their drugs to gain favorable treatment from pharmacy benefit managers (PBMs) who play an intermediary role between the drug maker and the insurance company.  These increases allegedly have been borne not by the insurers (which obtain rebates from the PBMs), but by patients, even insured patients, who are saddled with higher deductibles and who often have to pay a percentage of the full list price.

The Times pointed to a recent study in The Journal of the American Medical Association that found the price of insulin nearly tripled from 2002 to 2013.  And the Washington Post, also reporting on the story, cited to identical price increases made at identical times, leading to a 700% increase in insulin prices since 1996.  The lawsuit cites several examples of diabetes patients taking drastic measures to secure insulin treatments they are unable to afford.  These include injecting themselves with expired insulin, starving themselves to control their blood sugar, or even intentionally slipping into diabetic comas to secure insulin from hospital emergency rooms.

Given President Trump’s recent attack on the high cost of drugs, the lawsuit comes at an opportune time to get the government’s maximum attention.  That may explain why the defendant drug companies have already taken steps to address the issue of their rising prices.  As the Times notes, Lilly in December said it would offer a 40 percent discount off the list price of its insulin product, Humalog, for patients who are forced to pay full price. And Novo Nordisk, which makes Novolog, apparently has pledged to limit price increases in the American market to less than 10 percent in a year.  Certainly a step in the right direction.  But is it enough to fend off this latest legal salvo?

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