California sues drug companies for “inflating” insulin prices

By By Angela Harta and Samantha Young

Sacramento (CA), Jan 13 (KHN via EFE).- California Attorney General Rob Bonta filed a lawsuit against companies that dominate the US insulin market for allegedly artificially increasing prices and making this essential medicine less accessible to patients with diabetes.

The 47-page civil lawsuit filed January 12 alleges that three pharmaceutical companies that control the insulin market, Eli Lilly and Co., Sanofi and Novo Nordisk, are violating California law by unfairly and unlawfully increasing the cost of this medication.

It also targets three distribution intermediaries known as pharmacy benefit managers: CVS Caremark, Express Scripts and OptumRx.

“We are going to level the playing field and make this life-saving drug more affordable for all who need it, ending Big Pharma’s big profit scheme,” Bonta said at a news conference after filing the lawsuit in a Los Angeles court. “These six companies are complicit in aggressively raising the list price of insulin, at the expense of patients,” he added.

In the lawsuit, Bonta argued that prices have skyrocketed and some patients have been forced to ration their medications or forgo buying insulin altogether. The attorney general said a vial of insulin, which people living with diabetes rely on to control blood sugar, cost $25 a couple of decades ago but is now around $300.

A 2021 US Senate investigation found that the price of a long-acting insulin pen made by Novo Nordisk rose 52% between 2014 and 2019, and that the price of a rapid-acting pen from Sanofi spiked by about 70%

From 2013 to 2017, Eli Lilly increased its fast-acting pen by 64%. The investigation implicated drugmakers and pharmacy benefit managers in the increases, saying they perpetuated artificially high insulin prices.

“People with diabetes in California who require insulin to survive and who are exposed to the full price of insulin, such as uninsured consumers and consumers with high-deductible insurance plans, pay thousands of dollars a year for insulin” , according to the complaint.

Eli Lilly spokeswoman Daphne Dorsey said the company is “disappointed by the California attorney general’s false allegations,” arguing that the average monthly cost of insulin has fallen 44% in the past five years and that the The drug is available to anyone “for $35 or less.”

Mike DeAngelis, a CVS spokesman, said he would defend himself vigorously, saying that drug companies are the only ones that set list prices. “Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products, and we would welcome such action. The accusations that we have any role in determining the prices that manufacturers charge are false,” he said.

OptumRx, a division of UnitedHealthcare, said it welcomes the opportunity to show California “how we work every day to give people access to affordable medicine, including insulin.” And company spokesman Isaac Sorensen said it eliminated out-of-pocket costs for insulin.

Other companies targeted by the lawsuit, and the trade associations that represent them, did not immediately respond to requests for inquiries or decline to comment. Instead, they blamed each other for price increases, or described their efforts to cut costs. Costs for consumers vary widely depending on the health coverage they have, and the severity of the illness.

California follows other states, including Arkansas, Kansas and Illinois, in going after insulin companies and pharmaceutical middlemen, but Bonta said California is taking an aggressive approach by charging the companies with violating the state’s Unfair Competition Law ( 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 “drop tremendously” because the companies would no longer be able to raise prices, Bonta said.

Bonta joins other Democratic leaders in targeting the pharmaceutical industry. California 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 lower prices for the estimated 3.2 million Californians living with diabetes and dependent on insulin. medicine.

“Big Pharma continues to put profit before people, raising drug prices and restricting access to this vital medicine,” Brandon Richards, a spokesman for Newsom, told KHN. “That’s why California is moving toward making our own affordable insulin.”

By launching an aggressive attack on the pharmaceutical industry, California is also wading into a popular political fight. Many Americans express outrage over drug costs, while manufacturers blame pharmaceutical middlemen and health insurers. Meanwhile, middlemen are pointing fingers at drug makers.

Edwin Park, a professor at the Center for Children and Families at Georgetown University, said California’s push to enter the generic drug business, while also suing the pharmaceutical industry, could ultimately lead to lower costs. for patients at the pharmacy counter.

“You can put pressure on list prices to lower them,” Park said, referring to the label price of drugs. “And that can lead to lower out-of-pocket costs.”

There is not much transparency in how medicines are priced in the country. Manufacturers are the main culprits for high drug costs, because they are the ones who set list prices, Park said.

A growing body of research also indicates that pharmaceutical intermediaries are the main driver of high drug costs for patients. To bring prices down, 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 the triggers for high insulin costs. “But over time, more of the money goes to middlemen rather than manufacturers.”

KHN (Kaiser Health News) is the newsroom of KFF (Kaiser Family Foundation), which produces in-depth journalism on health. It is one of the three main programs of KFF, a non-profit organization that analyzes the problems of health and public health in the nation.

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