Minnesota Files Lawsuit Against Drug Companies for High Insulin Prices
Minnesota’s attorney general, Lori Swanson, recently filed a lawsuit accusing Sanofi SA, Novo Nordisk, and Eli Lilly and Co (all drug makers) of deceptively raising insulin prices. In a lawsuit filed in federal court in Trenton, New Jersey, Swanson took action, calling the companies out after the list price for some insulin products more than tripled since 2002.
Minnesota started last year with subpoenas for pricing data and records from the three insulin companies. Swanson said they have engaged in a “scheme” to raise their prices in order to offer the best rebates to pharmacy benefit managers (PBMs).
The lawsuit further alleges that drug companies fraudulently set artificially high prices for their products while offering rebates to pharmacy benefit managers in exchange for them covering the drug on behalf of health plans. PBMs negotiate prices for employers and health plans and typically take hefty discounts off the price from drug makers in exchange including the medicines on their preferred formularies.
The lawsuit claimed that the list prices the drug companies did not accurately approximate the true cost of insulin and were, thus, misleading. This practice made insulin less affordable for diabetes patients in high deductible health plans, uninsured patients, and senior citizens covered by Medicare.
“Insulin is a life-or-death drug for people with diabetes,” Swanson said. “Many people can’t afford the price hikes but can’t afford to stop taking the medication either.” She added, “In most industries, competitors compete with one another to offer the lowest prices. That’s how competition is supposed to work in this country. Here we have drug companies…competing to offer the highest prices.”
Novo Nordisk replied it was “committed to ethics and compliance in how we support patients.” The company indicated its “business practices are consistent with legal and regulatory requirements” and it’s insulin prices aren’t unreasonable. Sanofi and Lilly said the attorney general’s case is without merit.
Dr. Victor Montori, a Mayo Clinic endocrinologist, said it is “fundamentally cruel” for the companies to put drug-dependent patients at risk. “Lives have been made miserable and some have been cut short by the decision to place insulin outside their reach,” he said.
Many people with diabetes are forced to ration insulin, especially at the start of the year when new deductibles kick in for their health insurance plans. Amanda Swanson said she has private insurance but still finds months when she must pick between her medication for her type 1 diabetes and food. “Where do you draw the line?” she asked, “Because I have kids that have to eat, and I have to live.”
Swanson’s lawsuit marked the first by a state to target pricing practices of insulin manufacturers. Washington and New Mexico have been conducting similar investigations. The lawsuit seeks an injunction preventing companies from disseminating misleading prices for their products. It also seeks damages for Minnesota residents who’ve already paid out-of-pocket.
Rising insulin prices have been a point of contention for the past year with President Donald Trump demanding price cuts and U.S. Sen. Amy Klobuchar, D-Minn., appealing to manufacturers and writing legislation designed to compel them to lower their prices.
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