Insulin makers targeted in pricing inquiries
- Buried deep in its first quarter earnings filing with the Securities and Exchange Commission, Eli Lilly & Co. disclosed it is being investigated for insulin pricing practices by the attorneys general of New Mexico and Washington. The Washington AG is looking at Lilly's relationship with pharmacy benefit managers.
- Insulin competitor Novo Nordisk has also said it is under investigation by the two AGs for pricing and trade practices for its insulin products, going back as far as 2005.
- Separately, Lilly, Novo and French drugmaker Sanofi have all been named as defendants in four lawsuits seeking damages under various state consumer protection laws and the federal Racketeer Influenced and Corrupt Organizations (RICO) Act.
There has been an outcry of late about insulin prices, which are climbing, just as other drug prices have been. The chronic nature of diabetes means that patients have to pay these prices for the rest of their lives, and for many patients, insulins are becoming too expensive.
According to the Washington Post, human insulins from Lilly and Novo Nordisk have increased in price by 450% over inflation between 1996 and 2016. Lilly's Humalog, for example, has risen from $21 a vial to over $250. These price increases mean that patients are having to pay higher out-of-pocket costs, leading to issues with compliance as patients try to prolong time between filling prescriptions.
Things are getting complicated at the moment for the big three in insulin. As well as the investigations by the attorneys general, last month, Sanofi, Novo Nordisk and Lilly, along with the pharmacy benefit managers CVS, Express Scripts and UnitedHealth's OptumRx, were slapped with a complaint and demand for a jury trial from the Type 1 Diabetes Defense Foundation.
The suit claims the increased insulin list prices were the result of a scheme between the insulin manufacturers and pharmacy benefit managers (PBMs), where the companies had a list price for the insulin and then an undisclosed net price for the PBMs. A similar suit seeking class action was filed in January 2017.
Three of the four lawsuits targeting the trio involve pharmacy benefit managers, and all four seek class action status. Lilly believes "these lawsuits and claims are without merit and are prepared to defend against them vigorously."
- SEC Form 10-Q
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