California lawsuit accuses drugmakers of insulin overcharging

[January 13, 2023]  By Brendan Pierson

(Reuters) -California is suing the United States' leading insulin makers and pharmacy benefit managers, accusing them of using their market power to overcharge patients for the life-saving drug, the state's attorney general announced on Thursday.

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% of the insulin drugs sold globally.

It also names the three largest pharmacy benefit managers (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% 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 program, 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 supplies are pictured in the Manhattan borough of New York City, New York, U.S., January 18, 2019. REUTERS/Carlo Allegri

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%, 627% and 715%, respectively, since they were first launched.

Minnesota, Mississippi, Arkansas and Kansas, as well as groups of drug purchasers, have previously brought lawsuits similar to California's.

California Governor Gavin Newsom announced last July that the state had allocated $100 million to make its own low-cost insulin.

(Reporting By Brendan Pierson in New York; editing by Alexia Garamfalvi, Grant McCool and Aurora Ellis)

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