Texas Attorney General Ken Paxton has filed a lawsuit against major insulin manufacturers and pharmacy benefit managers over an alleged conspiracy to increase insulin prices.
Five things to know:
1. Insulin manufacturers named in the suit are Eli Lilly, Novo Nordisk and Sanofi. PBMs named in the suit include CVS' Caremark, UnitedHealth's Optum Rx and Cigna's Express Scripts.
2. Mr. Paxton alleges that the insulin makers have increased the prices of their insulins up to 1,000% over the past decade, according to an Oct. 3 news release from his office. Mr. Paxon said the alleged scheme violates the Texas Deceptive Trade Practices Act, constitutes unjust enrichment and represents an unlawful civil conspiracy.
3. Mr. Paxton alleges that the insulin makers "artificially and willingly raised insulin prices and then paid a significant, undisclosed portion back to the PBMs as a quid pro quo for inclusion in the PBMs' standard offerings." PBMs then allegedly granted preferred status to the manufacturer whose drug had the highest list price while excluding lower price drugs.
4. "This is a disturbing conspiracy by which pharmaceutical companies were intentionally and artificially inflating the price of insulin," Mr. Paxton said in the release. "Big Pharma insulin manufacturers and PBMs worked together to take advantage of diabetes patients and drive prices as high as they could."
5. Becker's sought comment from the insulin makers and PBMs named in the suit. Here are their responses:
- CVS said in a statement that pharmaceutical companies alone are responsible for the process they set in the marketplace for the products they manufacture.
"Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products and we would welcome such an action," the statement said. "Allegations that we play any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit." - Sanofi said in a statement that it will not comment on specific allegations, but that its pricing practices "have always complied with the law and the company is committed to helping patients access the medicine they need at the lowest possible price."
"Following through on that commitment requires Sanofi to navigate a complex environment," the statement said. "Under the current system, savings negotiated by health insurance companies and PBMs through rebates are not consistently passed through to patients in the form of lower co-pays or coinsurance. As a result, patients’ out-of-pocket costs continue to rise while — between 2012 and 2023 — the average net price of our insulins declined by 76%." - Eli Lilly said in a statement that the lawsuit is "baseless and should be dismissed."
"In the only three cases where insulin pricing allegations have been put to their proof, the plaintiffs have either dropped their case, lost their motion to proceed as a class action, or settled for no money. The outcomes speak for themselves." - Cigna did not provide direct comment on the Texas lawsuit, but pointed to a Sept. 20 statement related to a FTC lawsuit against the nation's three largest PBMs over allegedly inflating insulin prices. The company called that suit "demonstrably baseless."
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Optum Rx said in a statement that te lawsuit is baseless and "demonstrates a profound misunderstanding of how drug pricing works."
"PBMs, like Optum Rx, are the key counterweight to pharmaceutical companies’ otherwise unchecked monopoly power to set and raise drug prices," the statement said.
Read the full lawsuit here.