California Files Insulin Pricing Complaint

California is taking to the courts to challenge insulin pricing, charging that Eli Lilly, Novo Nordisk, Sanofi and three pharmacy benefit managers (PBMs) have conspired to set the price of insulin and to keep it on an ever-increasing trajectory.

The action, filed Jan. 12 in the Superior Court of California, Los Angeles, brings California in line with Mississippi, Minnesota, Arkansas, Kansas, and Harris County, Texas, all of which have filed similar suits in recent years.

The lawsuit alleges that the drugmakers and PBMs CVS Caremark, Express Scripts, and OptumRx “leveraged their market power to overcharge patients” and that the pricing schemes and trajectory of increase are “wholly artificial,” reflecting neither the manufacturing cost nor inflation.

The three manufacturers also appear to jointly raise prices, a process the suit calls “lockstep increases.” PBMs, for their part, allegedly require the companies to pay “large, secret rebates for preferential formulary placement” and give preferential standing to the highest-priced insulins, snubbing the molecularly identical but much cheaper biosimilars.