California lawsuit accuses drugmakers of insulin overcharging

California is suing the United States’ (US) insulin makers and Pharmacy Benefit Managers (PBMs), accusing them of using their market power to overcharge patients for the life-saving drug, the state’s attorney general announced yesterday.

The lawsuit, filed in California Superior Court in Los Angeles, targets Eli Lilly and Co, Novo Nordisk A/S and Sanofi SA, which together make more than 90 per cent of the insulin drugs sold globally.

It also names the three largest PBMs – UnitedHealth Group Inc’s Optum unit, CVS Health Corp’s CVS Caremark and Cigna Corp’s Express Scripts. PBMs maintain the lists of drugs covered by health insurance plans and negotiate prices with manufacturers, and the top three account for about 80 per cent of the market.

“Allegations that we play any role in determining the prices charged by manufacturers are false,” a CVS Caremark spokesperson said in an email. An Optum spokesperson said the company “work(s) every day to provide people with access to affordable drugs, including insulin.”

An Eli Lilly spokesperson said the company was disappointed by the lawsuit’s “false allegations” and pointed to the company’s programme, started in 2020, to ensure patients pay no more than $35 out of pocket for a 30-day supply of insulin.

The other companies did not immediately respond to requests for comment. Sanofi last year announced it was capping the 30-day cost of its insulin at $35 for uninsured patients.

Insulin is used by many people with diabetes to control blood sugar. About 8.4 million Americans depend on insulin, according to the American Diabetes Association.

California said that the companies’ dominance in the market has allowed them to hike insulin prices at patients’ expense, violating the state’s Unfair Competition Law. The state is seeking a court order stopping future violations of the law and an unspecified amount of money damages, including reimbursements for patients.

Prices of top-selling insulin drugs have soared in recent years. According to a 2021 Congressional report, Eli Lilly, Novo Nordisk and Sanofi had raised the price of their insulin drugs by 1,219 per cent, 627 per cent and 715 per cent, respectively, since they were first launched.

Edits by EP News Bureau