Minnesota accuses insulin makers of deceptive drug pricing

[October 17, 2018]  By Nate Raymond

(Reuters) - Minnesota's attorney general on Tuesday filed a lawsuit accusing drug manufacturers Sanofi SA, Novo Nordisk and Eli Lilly and Co of deceptively raising prices for insulin.

In a lawsuit filed in federal court in Trenton, New Jersey, Minnesota Attorney General Lori Swanson took aim at the companies after the list price for some insulin products more than tripled since 2002.

The lawsuit alleged that companies fraudulently set artificially high list price for their products while offering rebates to pharmacy benefit managers (PBMs) in exchange for them covering the drug on behalf of health plans.

PBMs negotiate drug prices for employers and health plans and typically demand hefty discounts off list price from drugmakers in exchange including the medicines on their preferred formularies.

The lawsuit contended that the list prices the drug companies set were so far from those net prices that they did not accurately approximate the true cost of insulin and were deceptive and misleading.

The practice made insulin less affordable for diabetes patients in high deductible health plans, the uninsured and senior citizens covered by the government Medicare healthcare program, the suit contended.

"Many people can’t afford the price hikes but can’t afford to stop taking the medication either," Swanson said in a statement.

Danish drugmaker Novo Nordisk in a statement said it was "committed to ethics and compliance in how we support patients." French drugmaker Sanofi and Indianapolis-based Lilly in separate statements said they believed the case was without merit.

The lawsuit comes amid continued concerns about rising U.S. drug costs, particularly for insulin, a hormone needed by many people with diabetes to control blood sugar levels.

Swanson's lawsuit marked the first by a state to target pricing practices of insulin manufacturers. The case was filed in New Jersey, where a similar proposed class action lawsuit is pending.

The logo and ticker for Eli Lilly and Co. are displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 18, 2018. REUTERS/Brendan McDermid

Two other states, Washington and New Mexico, have been conducting similar investigations, according to Novo Nordisk.

Novo's insulin products include Levemir, whose cost according to Swanson has risen from $120.64 per vial in 2012 to $293.75 in 2018. There have been similar price hikes for Lilly's HumaLog and Sanofi's Lantus, the lawsuit said.

The lawsuit seeks an injunction preventing the companies from disseminating misleading list prices for insulin products. It also seeks damages for Minnesota residents who paid out-of-pocket for their insulin.

But it comes a day after the U.S. government said it would propose requiring drugmakers to include the list price of prescription medicines in television commercials.

The case is State of Minnesota v. Sanofi-Aventis U.S. LLC, et al, U.S. District Court, District of New Jersey, No. 18-cv-14999.

(Reporting by Nate Raymond in Boston; Editing by David Gregorio and Bill Berkrot)

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