Insulin makers accused of price-fixing scheme

The three largest manufacturers of insulin are accused of conspiring in a price-fixing scheme, driving up the cost of lifesaving drugs for millions of patients, according to a lawsuit filed Monday.

IN-DEPTH REPORT: Our ongoing investigation into rising prescription drug prices

The federal suit filed in Massachusetts accuses drug makers Sanofi, Novo Nordisk and Eli Lilly of raising the list prices of their products “in perfect lock step” for years.

It cites stories of desperate patients — expected to foot an increasing percentage of prescription costs through high-deductible insurance plans — taking extreme measures like using expired insulin, starving themselves to control blood sugar and intentionally allowing their insulin levels to drop so low they have to be hospitalized so they can get free insulin samples. Out-of-pocket costs are up to $900 a month for some patients for treatments that used to cost around $25.

The accusations center on the shadowy rebate system between drug makers and pharmacy benefit managers, which the Dayton Daily News has been investigating.

Pharmacy benefit managers, or PBMs, work on behalf of health insurers and use the large number of patients they represent to negotiate rebates off a drug’s list price. The bigger the rebate, the more favorable placement a drug company’s product gets on the formularies PBMs create that say which drugs a health plan will cover.

RELATED: Who’s really controlling your drug prices? 5 things to know about PBMs

The lawsuit claims the rebate system has incentivized insulin makers to raise their list prices higher and higher to account for the rebates. This drives up the difference between the list price, which is the one the public sees, and the negotiated price that insurers actually pay, which is kept a secret.

“To secure the PBMs’ business, drug companies, including defendants, offer PBMs prices that are lower than their publicly reported, benchmark prices. Both the PBMs and drug companies refuse to disclose these lower, real prices, labeling them trade secrets,” the lawsuit said.

The bigger the difference between the list price and the secret negotiated price, the more money the PBM makes when it takes a cut of the rebate. The lawsuit argues the drug makers are complicit in this price inflation in order to please the powerful PBMs.

All three companies responded with statements denouncing the lawsuit.

“We strongly believe these allegations have no merit, and will defend against these claims,” Sanofi’s statement said.

Novo Nordisk said, “We are aware of the complaint and its characterization of the pharmaceutical supply chain. We disagree with the allegations made against the company, and are prepared to vigorously defend the company in this matter.”

And Eli Lilly’s statement said, “Lilly conducts business in a manner that ensures compliance with all applicable laws, and we adhere to the highest ethical standards.”

The Pharmaceutical Care Management Association, a pharmacy benefit manager trade group, released a statement condemning the attacks on the PBM industry laid out in the lawsuit, even though PBMs are not named as defendants.

“It inexplicably attacks prescription drug rebates, long used to reduce costs in public programs like Medicaid and in the commercial market,” the statement said.

READ MORE: Consumers kept in the dark over drug pricing

Brian Henry, a spokesman for Express Scripts, the nation’s largest pharmacy benefit manager, declined to comment on the lawsuit, but said, “Rebates don’t raise drug prices, drug makers do.”

The rising costs of prescription drugs has drawn ire from patients and politicians on both sides of the aisle, with President Donald Trump declaring that the drug industry is “getting away with murder.”

He’s meeting with the leaders of pharmaceutical companies this morning.


Dayton man lead plaintiff in drug suit alleging price-gouging

$180,000 price tag for Miami Twp. boy’s life-saving prescription

Why different prices at different pharmacies?

Reader Comments ...

Next Up in Local

Centerville schools, deputies investigate threat at CHS
Centerville schools, deputies investigate threat at CHS

A 16-year-old high school student is accused of making threatening comments on one of the district’s school buses and law enforcement is now involved in the investigation, school officials said Tuesday. The district said they were made aware of the threatening comments Monday night and the Montgomery County Sheriff’s Office is conducting...
Three charged after Middletown High School cafeteria fight
Three charged after Middletown High School cafeteria fight

Three Middletown High School students were charged with assault following a “major altercation” Monday in the cafeteria, police said. The fight occurred during lunch period and involved at least three students, all juveniles, said Lt. David Birk from the Middletown Division of Police. He said a male student was charged with two counts of...
Furloughed Wright Patt workers will be paid
Furloughed Wright Patt workers will be paid

Wright-Patterson Air Force Base furloughed about 8,600 civil service employees during a short-lived federal government closure, the most at the state’s largest single-site employer since a shutdown last struck less than five years ago. Federal employees who were furloughed or who worked during a three-day partial federal government closure Saturday...
Deputies: 2 arrested after 3-month-old child, 51 pounds of heroin, found in SUV
Deputies: 2 arrested after 3-month-old child, 51 pounds of heroin, found in SUV

Deputies in Mississippi arrested two women Monday night on suspicion of drug trafficking after authorities said they found 51 pounds of heroin and a 3-month-old child in an SUV the women were driving. A deputy pulled over a Ford SUV on Interstate 20 in Rankin County on Monday night for an unspecified traffic violation. Authorities said that during...
AK Steel promotes longtime employee to new management role
AK Steel promotes longtime employee to new management role

AK Steel’s Board of Directors has promoted AK Steel Treasurer Christopher Ross to the company’s vice president and treasurer, the company said. In that role, Ross will oversee the company’s treasury, investor relations, credit and corporate finance functions. “I am pleased to welcome Chris to our executive team,” AK Steel&rsquo...
More Stories