- Minnesota's attorney general is suing the nation's three largest diabetes drugmakers, Sanofi, Eli Lilly and Novo Nordisk, over what the AG calls "deceptive" pricing increases for their insulin products.
- The lawsuit notes how some of the big pharmas' insulins have doubled or almost tripled in price in recent years. The cost of Novo's Levemir, for instance, grew from $120.64 for a 100 units/mL vial in 2012 to $293.75 in 2018, according to attorney general Lori Swanson, while the cost of Sanofi's Lantus rose from $99.35 in 2010 to $269.54 this year.
- Sanofi, Lilly and Novo used these price increases to offer greater rebates to pharmacy benefit managers (PBMs) in exchange for more favorable placement on formularies, the lawsuit alleges. Such rebates don't trickle down to patients in high deductible health plans, uninsured or on Medicare — in turn hurting some of Minnesota's most vulnerable patients.
Insulin makers have found themselves at the heart of the drug pricing debate. Back in Oct. 2016, when the drug pricing backlash started reaching a fever pitch, the Washington Post pointed out the amount spent per patient on insulin rose 218% between 2002 and 2013.
Such increases motivated lawmakers to take a closer look at price hikes both in the insulin market and elsewhere. Lilly and Novo separately revealed in 2017 filings that multiple state attorney generals were investigating the companies for their insulin pricing practices. And in January of that year, those two and Sanofi were named as defendants in a class action lawsuit alleging they engaged in an insulin pricing to safeguard their profits.
Like that lawsuit, the one filed Tuesday by Minnesota's Swanson describes how Lilly, Novo and Sanofi allegedly used the opaque U.S. drug pricing system to protect their bottom lines instead of preserve patient access to affordable medicine.
For instance, the lawsuit claims the companies jacked up the price of their insulins to keep rebates high and PBMs happy, even though the supposed savings from those rebates weren't getting passed on to consumers.
"In theory, these rebates should result in lower health care costs," the lawsuit said. "In reality, however, the opposite has happened.
"Rather than compete to offer the lowest prices for their products, as one would expect in a competitive market, Defendants compete to offer the largest rebates, or 'spreads,' to PBMs," the lawsuit goes on to say. "In order to do so while still maintaining their profit margins, Defendants publish and disseminate deceptive and misleading list prices for their products, which allow them to offer higher rebates to PBMs while still earning approximately the same net price that they previously charged."
Those claims aren't new, however. Both federal and state officials have for some time called for lower drug prices and more transparency into how out-of-pocket costs are determined.
In May, the Centers for Medicare and Medicaid Services published new data on a "dashboard" created while former president Barack Obama was in office that shows how much the list price of medicines covered by Medicare Part B and Part D have changed over time. Sanofi's Lantus (insulin glargine) was one drug called out, with spending per dosage unit increasing 18.6% between 2012 and 2016.
Against the rising backlash, various players in the insulin pricing chain have made efforts to stem high drug prices. Express Scripts and CVS each enacted price control programs back in 2016. More recently, a group of leading U.S. health systems have been working to roll out a generic manufacturing company, Civica Rx, that will help ensure hospitals are supplied with lower-cost generic drugs.
"I know the stress of what the prices of insulin has done," Dan Liljenquist, chief strategy officer at Intermountain Health and one of the executives spearheading Civica Rx, told Healthcare Dive recently. "What we have now is not sustainable."
In spite of pressure over price, the main three diabetes drugmakers continue to earn billions of dollars from insulins and other blood sugar-controlling medications.
"We take this matter seriously, and are currently examining the allegations made in the complaint," a Novo spokesperson said in an email to BioPharma Dive regarding the Minnesota lawsuit. "As a company committed to ethics and compliance in how we support patients, we ensure that our business practices are consistent with legal and regulatory requirements."
"Sanofi is aware of the lawsuit, believes it to be without merit and will vigorously defend against it," a Sanofi spokesperson said in an email.