PHILADELPHIA (KYW Newsradio) — The Pennsylvania Attorney General’s Office is suing diabetes drug manufacturers and the companies that set prices, saying they’ve colluded for decades to gouge people who rely on the medicine.
In its 167-page lawsuit filed in Commonwealth Court, the Attorney General’s Office says the same insulin that sold for $20 in the 1990s now sells for $350, arguing prices started rising in the mid-2000s despite the cost to make insulin dropping over the same period.
The suit accuses insulin and diabetes manufacturers Eli Lilly, Novo Nordisk, and Sanofi Aventis of colluding in “shadow pricing,” where companies raise prices in lockstep with competitors to maximize profit rather than competing to keep prices low.
It also says Pharmacy Benefit Managers, Express Scripts, CVS Caremark, and Optum Rx play a key role, pointing to 2003, when PBMs began consolidating and gaining significant pricing power, saying in some cases price hikes from 2003 to 2016 were as high as 1000%.
The suit shows numerous charts with overlays of competing companies’ prices, stating they show the stepped increases occur at the same times.
The AG’s office says it violates Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, and requests financial penalties and damages to Pennsylvanians hurt by the inflated prices.
Sanofi Aventis says it is committed to helping patients access medicine at the lowest price possible, and pricing practices have always complied with the law. Eli Lilly calls it “unfortunate” that Pennsylvania’s attorney general would “sue a company that has led the way in making insulin more affordable.”
In a statement, CVS Caremark said, “Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture. Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products, and we would welcome such an action. Allegations that we play any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit.”
Novo Nordisk believes the allegations against it are “meritless,” and intends to “vigorously defend against these claims.”
