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State of California Sues Insulin Makers for Unfair Practices
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The Attorney General of the State of California, on Jan 12, initiated a lawsuit against the country’s largest insulin makers and pharmacy benefit managers (PBMs).
The lawsuit, filed in the county of Los Angeles, alleges three insulin manufacturers — Eli Lilly (LLY - Free Report) , Novo Nordisk (NVO - Free Report) and Sanofi (SNY - Free Report) — of violating California's Unfair Competition Law. The State claims that Eli Lilly, Novo Nordisk and Sanofi are driving up the cost of a life-saving drug like insulin through illegal and deceptive business practices.
The lawsuit has also named three PBMs – CVS Caremark, Express Scripts, and OptumRx –of being complicit in overcharging for insulin. PBMs are the entities that maintain the lists of drugs covered by health insurance plans and negotiate prices with manufacturers.
Through this lawsuit, the California state is seeking a court order to eliminate this unfair pricing and promotion of healthy competition. The suit also seeks relief from these companies, seeking to recover compensation for past overpayments.
The lawsuit states that the insulin market in the United States is an oligopoly where Eli Lilly, Novo Nordisk and Sanofi manufacture nearly all of the insulin sold in the country. The suit also claims that the alleged PBMs administer pharmacy benefits for roughly 80% of prescription claims managed. As a result, competition is highly limited in both these markets, allowing these six companies to keep aggressively hiking the list price of insulin.
The State of California also states that because of these price hikes, one out of four patients in the United States cannot afford insulin and is forced to ration their use which carries deadly consequences. The article also estimates that over 3 million people in California have been diagnosed with diabetes, the majority being type II diabetic patients.
The lawsuit references a report issued in 2021 that compared the insulin prices charged in the United States with different parts of the world. Per the report, the average price of a vial of insulin in the United States in 2018 was $98.70, while the average price in Canada for a vial is $12.00. This report concluded with a note stating that insulin in the United States costs ten times more than average for all other countries combined.
Per a Reuters article, Eli Lilly, Novo Nordisk and Sanofi had raised the price of their insulin drugs by 1,219%, 627% and 715%, respectively, since their initial launch. Similar lawsuits have also been filed by the states of Minnesota, Mississippi, Arkansas and Kansas. Some of these alleged companies have rebuked the claims made by the State and have stated these allegations as “false”.
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State of California Sues Insulin Makers for Unfair Practices
The Attorney General of the State of California, on Jan 12, initiated a lawsuit against the country’s largest insulin makers and pharmacy benefit managers (PBMs).
The lawsuit, filed in the county of Los Angeles, alleges three insulin manufacturers — Eli Lilly (LLY - Free Report) , Novo Nordisk (NVO - Free Report) and Sanofi (SNY - Free Report) — of violating California's Unfair Competition Law. The State claims that Eli Lilly, Novo Nordisk and Sanofi are driving up the cost of a life-saving drug like insulin through illegal and deceptive business practices.
The lawsuit has also named three PBMs – CVS Caremark, Express Scripts, and OptumRx –of being complicit in overcharging for insulin. PBMs are the entities that maintain the lists of drugs covered by health insurance plans and negotiate prices with manufacturers.
Through this lawsuit, the California state is seeking a court order to eliminate this unfair pricing and promotion of healthy competition. The suit also seeks relief from these companies, seeking to recover compensation for past overpayments.
The lawsuit states that the insulin market in the United States is an oligopoly where Eli Lilly, Novo Nordisk and Sanofi manufacture nearly all of the insulin sold in the country. The suit also claims that the alleged PBMs administer pharmacy benefits for roughly 80% of prescription claims managed. As a result, competition is highly limited in both these markets, allowing these six companies to keep aggressively hiking the list price of insulin.
The State of California also states that because of these price hikes, one out of four patients in the United States cannot afford insulin and is forced to ration their use which carries deadly consequences. The article also estimates that over 3 million people in California have been diagnosed with diabetes, the majority being type II diabetic patients.
The lawsuit references a report issued in 2021 that compared the insulin prices charged in the United States with different parts of the world. Per the report, the average price of a vial of insulin in the United States in 2018 was $98.70, while the average price in Canada for a vial is $12.00. This report concluded with a note stating that insulin in the United States costs ten times more than average for all other countries combined.
Per a Reuters article, Eli Lilly, Novo Nordisk and Sanofi had raised the price of their insulin drugs by 1,219%, 627% and 715%, respectively, since their initial launch. Similar lawsuits have also been filed by the states of Minnesota, Mississippi, Arkansas and Kansas. Some of these alleged companies have rebuked the claims made by the State and have stated these allegations as “false”.