Kansas Attorney General Files Insulin Lawsuit Against Manufacturers, PBMs

Kansas Attorney General Derek Schmidt has filed a lawsuit against drug manufacturers Eli Lilly, Sanofi-Aventis, and Novo Nordisk, as well as numerous pharmacy benefits managers (PBMs), alleging the defendants engaged in a deceptive insulin pricing scheme in violation of the state’s Consumer Protection Act.

According to the complaint, over the last 15 years, the drug manufacturers have raised the prices of their diabetes drugs in an “astounding manner” while the cost to produce the medications has actually decreased.

“Insulins, which today cost manufacturer defendants less than $2 per drug to produce, and which were originally released at a list price of $20 per drug in the late 1990s, now carry list prices that range between $300 and $700 per drug,” noted the complaint. In the last decade alone, the drug manufacturers raised the price of their medications up to 1000% although the medication has not changed at all, according to the complaint. The complaint notes the price hikes are in stark contrast to insulin’s origins, as “the discoverers sold the original patent for $1 to ensure that the medication would remain affordable.”

The complaint also alleges the PBMs, including Express Scripts, Evernorth Health, Medco Health, CVS Health, OptumRx, and Caremark, who control 80% of the PBM market in Kansas, grant preferred status in their formularies in return for kickbacks from the manufacturers.

“While the PBM defendants represent to diabetics and payers in Kansas that they use their market power to drive down prices for diabetes medications, these representations are patently false and intended to be deceptive and misleading,” alleges the complaint. Instead, PBMs are intentionally driving up the cost of the drugs, the complaint says.

“The consequence to Kansas diabetics from the outrageous price increases caused by the Insulin Pricing Scheme cannot be overstated. Kansas residents suffering from diabetes have been overcharged millions of dollars a year in out-of-pocket costs as a result,” noted the complaint. “For those Kansas residents with diabetes, the physical, emotional, and financial tolls of paying such excessive prices for diabetes medications is devastating. Unable to afford the drugs their doctors prescribe, many diabetics in Kansas ration or under-dose their insulin, inject expired insulin, reuse needles, and starve themselves to control their blood sugars. This behavior is extremely dangerous and has led to serious complications or even death.”

The complaint seeks financial restitution, punitive damages, civil penalties, and an injunction to prevent the defendants from engaging in deceptive trade practices.