Minnesota Attorney General Lori Swanson is suing three major pharmaceutical companies that make insulin in the U.S. — Sanofi-Aventis, Novo Nordisk and Eli Lilly — for the alleged price-gouging of people with diabetes who need the lifesaving drug. This is the first state to take legal action over the issue.
The lawsuit claims drugmakers fraudulently set "artificially high" list prices for their drugs and negotiated steep rebates with pharmacy benefit managers. This practice allegedly made the drugmakers' insulin more profitable for PBMs and in turn made the middlemen more inclined to place the drug on their formularies, or list of approved drugs under a health plan.
As a result of the practice, Ms. Swanson claims, the list prices the drug companies set were so far removed from the net prices that they failed to reflect the true cost of insulin and were deceptive and misleading.
While insured patients often pay a much lower rate than the list price, uninsured patients or those with high-deductible insurance plans ended up paying the artificial list price, the lawsuit contends.
"Insulin is a life-or-death drug for people with diabetes. Many people can't afford the price hikes but can't afford to stop taking the medication either," said Ms. Swanson.
Although the medications haven't fundamentally changed, the list prices of various insulin products have tripled since 2002, causing significant concerns about affordability.
In response to the lawsuit, Novo Nordisk defended itself, saying its "business practices are consistent with legal and regulatory requirements."
Eli Lilly pledged to "vigorously" fight the legal action, saying it believes "the claims are without merit."
Read the full news release here.