Kentucky Attorney General Sues Insulin Makers of Alleged Pricing Scheme

Kentucky Attorney General Sues Insulin Makers of Alleged Pricing Scheme

-Craig Idlebrook

On Monday, Kentucky’s attorney general announced that he was suing the three major insulin manufacturers in district court for allegedly utilizing deceptive practices to artificially boost the price of insulin.

In a strongly worded court filing, Kentucky Attorney General Andy Beshear accused Eli Lilly and Company, Novo Nordisk, and Sanofi of violating the state’s consumer protection law and advertising regulations, as well as making profits by unjust means.

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The lawsuit alleges the three companies have publicly claimed wholesale distributors pay high average prices for their insulin without making a reasonable effort to confirm that those prices are accurate. Attorney General Beshear also alleges the insulin manufacturers secretly negotiated with pharmacy benefit managers (PBMs) to negotiate a steep discount on insulin prices. In this alleged scheme, the companies set the prices high enough to profit from sales despite the discount and gain coveted space on PBM formularies.

“(The companies) have admitted their list prices are a ‘not so relevant’ sham that it ‘was never their intention’ for individual patients to pay,” the court filing states. “In the meantime, whether Defendants ‘intended’ people to pay them, the ‘not so relevant’ prices…determine…prices paid by wholesalers, pharmacies, and—most unfortunately—uninsured and underinsured people with diabetes.”

The three insulin companies are facing several lawsuits in regards to their insulin pricing behavior. In 2018, the state of Minnesota launched a similar lawsuit as this one, and there is also a class-action suit by customers against insulin makers working its way through the court system.

In the Kentucky filing, Attorney General Beshear also claimed that the three companies were only now attempting to nominally provide some relief for insulin pricing because of growing public anger.

“As public outcry has grown louder, (the companies) now claim to want to provide lower-cost ‘authorized generics’ and other alternatives to help uninsured and underinsured people with diabetes bear the costbut only if such alternatives do not undercutunjust profits. (Their) acknowledgment of the harm and proposed solutions to a crisis they created comes too little, too late,” the attorney general states.

The attorney general’s filing quotes blogposts and statements from the three insulin companies in which, it’s alleged, the companies spelled out their pricing strategy and indicated the wholesale list price for insulin is not a relevant metric.

Mr. Beshear, who is running for the Democratic nomination for governor in 2020, is asking that civil penalties be awarded for the alleged violations to Kentucky regulations. He also asks that insulin sale profits from potentially illegal activity be returned to Kentucky consumers.

The three insulin companies have not yet had a chance to file a response to the lawsuit. A spokesperson for Sanofi said the company looks forward to “vigorously defending itself against “meritless” claims, and a Novo Nordisk spokesperson said the company takes “this matter seriously, and are currently examining the allegations made in the complaint,” according to published reports.

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