If you’re a diabetic, insulin isn’t a luxury—it’s the difference between life and death. On Monday, a lawsuit accused three pharmaceutical giants—Sanofi, Novo Nordisk, and Eli Lilly—of conspiring to drive up the price of this lifesaving drug to increase their profit margins.
Filed in Massachusetts federal court, the lawsuit alleges that the three companies intentionally raised their insulin list prices to gain favorable treatment from pharmacy benefit managers. Pharmacy benefit managers act as intermediaries between health insurers and drug makers, helping to decide how a drug will be covered on a list of approved drugs. According to the lawsuit, drug manufacturers end up setting two prices for their drugs—a higher list price and a lower, secret, “real” price. The pharmacy benefit manager negotiates the difference between the two, kicking this “rebate” back to the insurer and taking an undisclosed cut in the process. The lawsuit alleges that the three drug makers compete to offer the best payment to the pharmacy benefit manager instead of competing to offer a lower, “real” price to insurers.
This alleged conduct drives up list prices and hurts patients. The price of insulin has nearly tripled between 2002 and 2013; today, insulin treatments can cost a patient up to $900 per month. Some patients, unable to afford their medication, have been forced to inject themselves with expired insulin or to starve themselves to control their blood sugar levels. The lawsuit even cites instances in which patients allowed themselves to slip into diabetic ketoacidosis—a potentially fatal blood syndrome—to obtain insulin from hospital emergency rooms.
The lawsuit follows on the heels of several other high-profile cases of pharmaceutical opportunism—perhaps most notably, former Turing Pharmaceuticals CEO Martin Shkreli’s decision to raise by 5,000% the price of the lifesaving drug Daraprim. Unfortunately, it appears that a pharmaceutical company need not be headed by a self-described robber baron to prioritize its profits over the lives of the patients it purports to serve.
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