California sues insulin makers for scheme to illegally raise drug prices

California On Thursday it announced that it would file a lawsuit against the companies that produce and promote the majority of insulin in the country, accusing them of operating illegally. increasing drug prices and demanded they return millions of dollars to some diabetics who state officials say were overcharged for the medicine they need to live.

The lawsuitto be filed in Los Angeles County Superior Court by Attorney General Rob Bonta, is the latest in a parade of legal actions against these companies from states across the political spectrum — all accusing the giants of corporations to abuse their power to eliminate competition and increase their profits by keeping insulin prices high.

A 2021 study of the RAND Corporation comparing insulin prices in nearly three dozen countries found that prices in the United States were about 10 times higher than elsewhere. The average price of a vial of insulin in the United States is $98, while in nearby Canada it is $12.

Attorneys general of Kansas, arkansas, Mississippi, Minnesota and Kentucky all have filed similar lawsuits in recent years.

“This is not a partisan issue,” said Bonta, a Democrat who was elected to his first full term in November. Bonta said state attorneys general from both major political parties “are all saying the same thing: That the status quo is unacceptable and problematic and terrible.”

Bonta sued three companies that make insulin – Eli LillyNovo Nordisk, and Sanofi — and three companies that manage prescription drug programs that provide insulin — CVS Caremark, Express Scripts and Optum Rx.

Bonta said manufacturers are raising insulin prices “one after the other.” Prescription drug managers then negotiate with manufacturers to get a percentage of that price in exchange for famously promoting their high-priced insulin over cheaper alternatives.

“People are losing their lives because they can’t afford drugs,” Bonta said.

Daphne Dorsey, associate director for media relations for Eli Lilly, said the company was “disappointed by the California Attorney General’s false accusations.” He said the average monthly out-of-pocket cost for Lilly insulin is $21.80, a 44% decrease over the past five years. He urged anyone paying more than $35 a month for Lilly insulin to contact the company.

A Novo Nordisk representative declined to comment on the lawsuit. But the company provided background information saying that net prices for its insulin products — the list price minus rebates and discounts — have fallen in each of the past five years “by substantial about the significant rebates and discounts paid by manufacturers to ensure access to patients.”

Mike DeAngelis, executive director of corporate communications for CVS Healthsaid that only the manufacturers set the list price of their products.

“There is nothing in our agreements that prevents drug manufacturers from lowering the prices of their insulin products and we welcome such action,” he said. “Allegations that we have any role in determining the prices charged by manufacturers are untrue. We plan to vigorously defend this complaint.”

A statement from Optum Rx said the company “welcomes the opportunity to show the California Attorney General’s Office, like other State Attorneys General, how we work every day to provide people have access to affordable medicines, including insulin.”

Insulin is produced by the pancreas and used by the human body to convert the food we eat into energy. People with diabetes cannot produce enough insulin. People with Type 1 diabetes must take insulin every day to survive.

A group of Canadian scientists discovered insulin a century ago. They sold the patent to the University of Toronto for just $1, hoping to avoid a monopoly that would cause high prices. But eventually, the market was dominated by just three companies.

Kevin Wren, an activist associated with the California chapter of #Insulin4All, said he has to take insulin every day to survive. In 2009, Wren said she was working two jobs and had no health insurance. He had to ration his insulin, taking less than the recommended dose to make it last longer — a dangerous practice he says ended up in the hospital with ketoacidosis, a serious complication of diabetes.

Now, Wren says he has good health insurance and doesn’t have to ration his insulin supply. He said he breaks the law every month by giving people insulin from someone else’s prescription “all so they don’t have to ration.”

Major insulin companies have assistance programs to help people buy insulin. Novo Nordisk said in 2021 that more than one million people used a form of help from the company to buy its insulin.

The California state government thinks so make your own insulin and sell it at a cheaper price. Last year, the state Legislature approved $100 million for the project, with $50 million earmarked for the development of three types of insulin and the rest going toward a potential manufacturing facility.

State officials hope that a California brand of generic insulin can disrupt the market and lower all insulin prices. Bonta said he hopes his lawsuit will do the same thing.

“California can drive markets,” Bonta said, citing the state’s size and economic power. “Change originates and starts here.”

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