WAUKEGAN, IL — Lake County on Tuesday became the latest governmental body to file suit against insulin manufacturers and pharmacy benefit managers, accusing the companies of illegally conspiring to hike prices.
The federal lawsuit was filed on behalf of the county against Eli Lilly, Novo Nordisk, Sanofi, which make the lifesaving medication, and CVS Caremark, Express Scripts and OptumRX, which administer prescription drug programs.
The trio of major insulin manufacturers supply more than 90 percent of diabetes drugs used globally, while the three pharmacy benefit managers, or PBMs, handle pharmacy benefits for about 80 percent of managed prescription claims in the U.S., according to county officials.
Lake County Board Chair Sandy Hart said county officials are fighting for “basic economic fairness” for county residents.
“The Lake County Board has been striving to control the costs of its health insurance plans for its employees,” Hart said in a statement announcing the suit. “Lawsuits like these tell companies that they must follow the rules and allow competition to benefit everyone.”
More than one in 10 Lake County residents have diabetes. And over the past quarter-century, the list price for certain insulins has increased much faster than inflation — or costs associated with manufacturing and research, according to the Lake County State’s Attorney’s Office.
Lake County State’s Attorney Eric Rinehart said the county is looking to get a refund for costs associated with what he described as an illegal pricing scheme.
“These defendants have illegally conspired to unfairly increase their profits. Fair competition and enhanced technology should be driving prices down, but the defendants’ scheme raised prices on a drug that is necessary for millions,” Rinehart said in a statement.
Insulin prices in the United States are about 10 times higher than anywhere else in the world, according to a 2021 RAND Corporation study. On average, a vial of insulin costs $12 in Canada and $98 in the U.S.
The 152-page complaint alleges that the industry violates federal Racketeer Influenced and Corrupt Organization, or RICO, statutes and Illinois’ Consumer Fraud and Deceptive Business Practice Act.
It argues that manufacturers grant rebates to PBMs based on a percentage of the list price and PBMs pick which diabetes medication to buy based on where they can get the highest rebates — rather than what would provide the lowest price for consumers. As a result, insulin-makers increase list prices to incentivize PBMs, according to the suit.
“PBMs can capture as much as half of the consumer price on each insulin prescription although they do not contribute anything to the manufacturing, innovation, production of the drug,” Rinehart said.
Representatives of PBMs have disputed the claim, pointing out that drugmakers set their own prices and nothing in their agreements with pharmaceutical companies prevent them from lowering prices.
Meanwhile, spokespeople for insulin manufacturers point to recent reductions in insulin prices.
The Inflation Reduction Act, passed by Congress last year, capped insulin copays at $35 for Medicare beneficiaries, starting in January for Park D and July for Part B.
And Vermont Independent Sen. Bernie Sanders has introduced Insulin for All Act of 2023, which would cap the list price of insulin at $20 per vial for everyone, regardless of insurance status.
“We can no longer tolerate a rigged health care system that forced 1.3 million people with diabetes to ration insulin while the three major insulin manufacturers made $21 billion dollars in profits,” Sanders said, announcing the draft legislation last month.
“Now is the time for Congress to take on the greed and power of the pharmaceutical industry and substantially lower the price of insulin,” he said. “In the richest country in the history of the world, no one should die because they cannot afford the medication they need.”
Last month, Eli Lilly announced it was cutting the cost of most insulins to a maximum of $35 per month. And a couple weeks later, Novo Nordisk announced a 75 percent cut to insulin list prices, starting next year.
The Lake County suit follows similar complaints from attorney generals in Arkansas, California, Kentucky, Illinois, Louisiana, Michigan, Minnesota and Mississippi, among others.
In December, Illinois Attorney General Kwame Raoul filed suit in Cook County Circuit Court, deputizing private trial lawyers from four out-of-state firms as “special assistant attorneys general” while pledging them a cut of any money received by the state.
Source and full article: https://patch.com/illinois/lakeforest/lake-county-accuses-insulin-manufacturers-price-fixing-conspiracy