Keller Rohrback Investigates the Inflated Price of Insulin
May 1, 2017
On March 17, 2017, the nationally recognized class-action law firm of Keller Rohrback L.L.P. filed suit against the nation’s three largest pharmacy benefit managers (“PBMs”), Express Scripts (ESRX:US), OptumRx (UNH:US), and CVS Caremark (CVS:US), and three major drug manufacturers, Sanofi-Aventis (SNY:US), Novo Nordisk (NVO:US), and Eli Lilly (LLY:US), who produce the widely-prescribed analog insulins: Lantus, Apidra, Levemir, Humalog, and Novolog.
The complaint, which was filed in the New Jersey federal district court, alleges that the PBMs—insurance industry middlemen who negotiate drug prices—conspired with the insulin manufacturers to artificially inflate the price of insulin for their own collective benefit. This profit-seeking move has directly injured individual patients and other purchasers of insulin financially and put the lives of millions of diabetes sufferers at risk.
While drug manufacturers certainly contribute to the problem, they do not act alone. Rather, manufacturers collude with PBMs to raise insulin “list prices”—which the PBMs direct consumers to pay—thus reaping outsized profits from people who need insulin to stay alive.
The Plaintiffs’ complaint explains how the PBMs and manufacturers are gaming the system. Instead of competing based on the lowest price to the consumer, manufactures are competing based on the highest rebates to the PBMs. In return, manufacturers receive exclusionary or preferential status on the PBMs’ formularies. Formularies are ranked lists of drugs maintained by PBMs that health insurers rely upon to determine how much of their members’ drug costs they will cover. Manufacturers’ sales profits depend on access to these enormous pools of members.
To prevent the rebates from cutting into their profits, the manufacturers raise what they call the “list” price of insulin. The higher the “list” price, the higher the rebate and other fees, and the larger the profit to the PBMs. The result is a vicious cycle of “list” price increases by manufacturers, vying to win the favor of the PBMs.
Consumers with out-of-pocket payment obligations, a large and growing population, are charged an amount based upon the artificially inflated “list” price. This includes the uninsured and people in a variety of types of health plans with co-insurance, co-payment, and high-deductible requirements.
The artificially high cost of insulin, as well as other diabetic medications and supplies, needlessly inflicts physical, emotional, and financial harm on patients and their families. If you or someone you know, purchases diabetes pharmaceuticals, please contact attorneys Michael Meredith or Gretchen Obrist to learn more about whether you too have been subject to unlawful pricing. Call 800.776.6044 or email .
Keller Rohrback L.L.P. serves as lead and co-lead counsel in class action lawsuits throughout the country, including actions asserting RICO, ERISA, and consumer claims against PBMs. With offices in New York, Seattle, Phoenix, Ronan, Oakland, and Santa Barbara, our Complex Litigation Group is proud to offer its expertise to clients nationwide. Our trial lawyers have obtained judgments and settlements on behalf of clients in excess of eighteen billion dollars.