California Attorney General Rob Bonta filed a lawsuit against six companies that dominate the United States insulin market, alleging that they are violating California law by unfairly and illegally raising the price of the drug. The six companies – three pharmaceutical companies and three pharmacy benefit managers – are Eli Lilly and Co., Sanofi, Novo Nordisk, CVS Caremark, Express Scripts, and OptumRx.
Bonta alleges in the filing that insulin prices have increased so significantly that some patients are rationing their medicine, or forgoing the prescription altogether. He notes that in the “late 1990s, insulin could be obtained for less than $25,” compared to “hundreds of dollars” for a monthly supply today. “California diabetics who require insulin to survive and who are exposed to insulin’s full price, such as uninsured consumers and consumers with high deductible insurance plans, pay thousands of dollars per year for insulin,” the complaint reads.
Bonta further alleges that the defendant companies artificially inflate the price of insulin and that they know the price of insulin is too high, but yet they “make misleading statements to support and further the inflation of analog insulin’s artificial list price.” He states that the manufacturer defendants misrepresent that insulin list price increases are not important because of alleged declining net prices. However, he argues that “net prices are inflated when compared to the Manufacturer Defendants’ costs and the amounts paid by persons in other countries.” He alleges that the PBM defendants’ misrepresentations tend to center around a feigned interest in lowering costs for consumers by lowering insulin’s net price. He states that PBM defendants focus more on net price trends instead of the increasing list price trend, thereby “obscur[ing] the fact that they are actively driving up the price of insulin, while reinforcing their control of the market, at the expense of consumers who end up paying larger out-of-pocket costs.”
Similar Lawsuits
This lawsuit follows suits filed by other states, such as Arkansas, Kansas, and Illinois, who have also filed complaints against pharmaceutical companies and pharmacy benefit managers. However, California goes a step further by alleging that the companies are acting in violation of the state’s Unfair Competition Law. If California is successful with that allegation, the companies may be liable for significant civil penalties.
Company Reactions
As one might expect, the companies on the other end of the litigation intend to defend themselves. Eli Lilly spokesperson Daphne Dorsey said the company is “disappointed by the California attorney general’s false allegations,” arguing that the average monthly out-of-pocket cost of insulin has fallen 44% over the past five years, and the drug is available to anyone “for $35 or less.”
Mike DeAngelis, a spokesperson for CVS, said it would vigorously defend itself, saying that pharmaceutical companies alone set list prices. “Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products, and we would welcome such action. Allegations that we play any role in determining the prices charged by manufacturers are false,” he said.
OptumRx said it welcomes the opportunity to show California “how we work every day to provide people with access to affordable drugs, including insulin.” Company spokesperson Isaac Sorensen also pointed to the way OptumRx has eliminated out-of-pocket costs for insulin.