Penn State sues insulin makers, PBMs over pricing scheme

 The Pennsylvania State University in University Park filed a federal lawsuit Jan. 13 alleging major insulin manufacturers and pharmacy benefit managers artificially inflated the price of insulin nationwide.

The complaint alleges Eli Lilly, Novo Nordisk and Sanofi — which controlled 92% of the global diabetes drug market by volume and 96% by revenue in 2020 — colluded with the nation’s three largest PBMs, CVS Caremark, Express Scripts and OptumRx. Together, these PBMs control more than 80% of the PBM market, according to the filing.

The complaint outlines how insulin manufacturers allegedly increased list prices by up to 1,000% over the last two decades — from about $20 in the late 1990s to as much as $700 per vial — despite production costs as low as $2 per vial. These list prices allegedly enabled PBMs to collect larger rebates and fees, which were not fully disclosed to payors like Penn State.

The university, which operates several self-insured health plans, claims it paid inflated prices for diabetes drugs and was directly harmed. It seeks damages and injunctive relief.

In statements shared with Becker’s, CVS Caremark said the lawsuit is “baseless” and that drugmakers alone set prices, adding “nothing in our agreements prevents manufacturers from lowering prices.” 

Novo Nordisk also called the allegations “meritless,” while Sanofi said its practices comply with the law and blamed rising patient costs on a rebate system that doesn’t consistently pass savings to consumers.

Optum Rx said its negotiations have helped lower monthly insulin costs to less than $18 for members, and a Lilly spokesperson said previous insulin pricing cases were dropped, denied class certification or settled for no money. Lilly added that it cut insulin prices by 70% and capped out-of-pocket costs at $35 per month.

https://www.beckershospitalreview.com/pharmacy/penn-state-sues-insulin-makers-pbms-over-pricing-scheme/