The Lake County state’s attorney has filed a federal lawsuit accusing the nation’s largest insulin manufacturers and pharmacy benefit managers of conspiring to artificially increase insulin prices.
The lawsuit was filed Tuesday in the United States District Court for the Northern District of Illinois.
The lawsuit said that manufacturers Eli Lilly, Novo Nordisk and Sanofi, and pharmacy benefit managers CVS Caremark, Express Scripts and OptumRx, have leveraged their market power to generate “billions of dollars in illicit profits at the expense of payors.”
The suit alleges the defendants illegally conspired to artificially increase insulin prices in violation of Illinois’ Consumer Fraud and Deceptive Business Practices Act.
The Lake County State’s Attorney’s Office said the list price of certain insulins has “greatly increased” over the past 25 years — in some cases by more than 1000%.
The increase has outpaced the consumer price index or the relevant rise in costs associated with manufacturing and research, the state’s attorney’s office said in a statement.
“Equal access to healthcare is a basic right. But the high cost of prescription drugs is hurting millions of people. These defendants have illegally conspired to unfairly increase their profits. Fair competition and enhanced technology should be driving prices down, but the defendants’ scheme raised prices on a drug that is necessary for millions,” Lake County State’s Attorney Eric Rinehart said.
“On behalf of our retirees and employees, and by extension the taxpayers of Lake County, we seek to recover costs that unfairly burdened Lake County as a result of this illegal pricing scheme. I am proud that our office is leading the way in this fight for basic decency and fairness in our markets,” Rinehart said.
10% of the adult population in Illinois has diabetes. In Lake County, 11% of the adult population has the disease.
The lawsuit focuses on the inflated costs that the Lake County government has paid on behalf of its employees and a special program for some Medicare recipients.
The 150-page complaint described how three manufacturers control over 90% of the global market for diabetes drugs.
The manufacturers work in conjunction with three pharmacy benefit managers named in the suit, which administer pharmacy benefits for roughly 80% of prescription claims managed in the United States.
The state’s attorney said competition is extremely limited, resulting in manufacturers and pharmacy benefit managers working together to “aggressively increase the prices of the diabetes medication.”
The lawsuit alleges that pharmacy benefit managers derive massive profits from manufacturer rebates.
“Because rebates are based on a percentage of the medication’s list price, manufacturers increase drug prices to provide more incentive to PBMs,” the state’s attorney’s office said.
The lawsuit alleges that pharmacy benefit managers select the medication based on the highest possible rebates and not the lowest price for the consumer.
“PBMs can capture as much as half of the consumer price on each insulin prescription although they do not contribute anything to the manufacturing, innovation, production of the drug,” Rinehart said.
The Lake County State’s Attorney’s Office is seeking restitution and economic damages associated with the price increases, punitive damages and attorney costs.
“The Lake County Board has been striving to control the costs of its health insurance plans for its employees. Lawsuits like these tell companies that they must follow the rules and allow competition to benefit everyone. Along with State’s Attorney Rinehart, we will never stop fighting for basic economic fairness for everyone in Lake County,” Lake County Board Chair Sandy Hart said.