California has filed a lawsuit alleging that numerous significant drugmakers and pharmacy benefit managers undertook unlawful acts to raise the price of insulin.
Major insulin producers Eli Lilly, and Sanofi, Novo Nordisk as well as PBMs CVS Caremark among others, are being accused of abusing their dominant market position to overcharge patients.
Attorney General Rob Bonta’s office released a statement citing a recent investigation that found American patients pay nearly 10 times more for insulin than people in other countries.
The three pharmaceutical companies at the center of the complaint generate 90% of the world’s insulin supply, while the three pharmacy benefit managers handle 80% of drug claims in the U.S.
According to the lawsuit, both sets of businesses are accountable for the high price of insulin because manufacturers are in charge of determining list pricing and PBMs handle the negotiations of discounted prices on behalf of health insurance firms. Drugmakers will raise list pricing to obtain bigger rebates because refunds are based on list price.
High insulin prices have an especially severe impact on people of color and the economically disadvantaged, as per the announcement. In California alone, over 10% of adults suffer from diabetes.
“Insulin is a necessary drug that millions of Americans rely upon for their health, not a luxury good. With today’s lawsuit, we’re fighting back against drug companies and PBMs that unacceptably and artificially inflate the cost of life-saving medication at the expense of vulnerable patients,” stated Bonta in the release. He added that preventative or life-saving drugs should never be rationed or denied to anyone. California will maintain its position as a frontrunner in the fight for universal healthcare and the low-cost drugs individuals require to remain healthy.
The PMBs being sued have denied any responsibility for the high cost of insulin. CVS Caremark stated that pharmaceutical corporations alone decide the list price for their drugs, and that there is no provision in their contracts that prevents insulin price reductions from pharmaceutical companies. According to Optum Rx’s spokesperson, pharmacy benefit managers are the only partners in the prescription medication supply chain whose purpose is to minimize drug costs.
CVS Caremark has stated that it will defend itself ferociously against this complaint, while OptumRX has asserted that it embraces the chance to show the California Office of the Attorney General how the company strives each day to offer people access to cost-effective drugs, including insulin.
Eli Lilly expressed dismay at the allegations made by the California attorney general, mentioning that its insulin is available to everyone, regardless of insurance status, for $35 per month.
There is growing public anger toward PBMs because of their alleged involvement in driving up the cost of pharmaceuticals sold in the U.S. Express Scripts, Humana, OptumRx, CVS Caremark, MedImpact Healthcare Systems and Prime Therapeutics were the six major PBMs in the country ordered by the FTC last year to prove detailed data on their business procedures.
