The City of Alexandria in Virginia has filed a federal lawsuit against a long list of drugmakers and distributors, alleging a conspiracy and collusion that led to skyrocketing insulin prices at the expense of employers.
The lawsuit, filed in the Eastern District of Virginia on Tuesday, seeks unspecified damages in a jury trial.
The defendants include a trio of drug manufacturers — Eli Lilly, Novo Nordisk and Sanofi — that make up over 90% of the insulin market. Other defendants in the lawsuit include some of the most prominent pharmacy benefit managers (PBM), including CVS and Express Scripts, which account for over 80% of the market.
Lawyers retained by the city said the drugmakers increased the cost of each unit of insulin at exponential levels, even though the cost to produce that drug has decreased over the same time span. The same law firm is also representing Arlington County in a similar lawsuit.
The lawsuit alleges PBMs took rebates, fees and other forms of payment from the drugmakers, when they were supposed to be working to lower prices for the payors (the one who purchases the health plan, whether it’s a private employer, personal plan or government/public plans) that hired them.
“Instead, the PBMs intentionally incentivize the Manufacturers to inflate their list prices. The PBMs’ ‘negotiations’ intentionally drive up the price of the at-issue drugs and are directly responsible for the skyrocketing prices of diabetes medications, conferring unearned benefits upon the PBMs and Manufacturers alike,” according to the lawsuit.
The suit notes everyone that has purchased insulin at those false prices have been hurt, including the City of Alexandria, which “has been overcharged substantial amounts of money.”
The mayor of Alexandria, Justin Wilson, did not respond to WTOP with a comment about the lawsuit.
In response to the lawsuit, a Sanofi spokesperson said in a statement to WTOP that while it will not comment on the specific allegations, Sanofi’s pricing practices have “always complied with the law” and it offers savings programs to help people reduce prescription medicine costs.
“Under the current system, fees and savings negotiated by health insurance companies and PBMs through rebates are not consistently passed through to patients in the form of lower co-pays or coinsurance. As a result, patients’ out-of-pocket costs continue to rise while — between 2012 and 2022 — the average net price of our insulins declined by 58%.”
CVS responded with a statement reading:
“Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture. Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products and we would welcome such an action. Allegations that we play any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit.”
