The Kansas Attorney General filed a lawsuit against leading national insulin manufacturers and pharmacy benefit managers over alleged violations of the Kansas Consumer Protection Act, on Friday.
The lawsuit accuses the insulin manufacturers of operating an insulin pricing scheme that forces Kansans to pay excessive costs for the life-saving drug to control diabetes. The lawsuit was filed in Shawnee County District Court on behalf of Kansas residents who rely on insulin to control their diabetes and maintain their quality of life, according to the AG’s office.
The complaint alleges the defendants maintained a pricing scheme that inflated the cost to produce insulin, forcing Kansans with diabetes to choose between rationing their medication to stretch their healthcare dollars or going without insulin and risk potentially deadly complications.
The companies named in the lawsuit include Eli Lilly and Company, Sanofi-Aventis U.S. LLC, and Novo Nordisk Inc. Combined the three companies account for 99 percent of the insulin currently on the U.S. market. Also named were pharmacy benefit managers (PBMs) CVS Health Corporation, CVS Pharmacy, Inc., Caremark Rx, LLC, Caremark, LLC, CaremarkPCS Health, LLC, Evernorth Health, Inc., Express Scripts, Inc., Express Scripts Administrators, LLC, Medco Health Solutions, Inc., ESI Mail Pharmacy Service, Inc., Express Scripts Pharmacy, Inc., and OptumRx, Inc.
The lawsuit alleges that the insulin pricing scheme worked by the insulin manufacturers gaining formulary access from PBMs for their diabetic treatments, artificially and willingly raising their prices and then secretly paying a significant portion of that price back to the PBMs. PBMs then granted national formulary status based upon the highest inflated price and upon which diabetes medications generate the largest profits for these PBMs.
The lawsuit goes on to allege that, since 2003, these insulin manufacturers have worked together to raise the reported prices of insulin. The manufacturers have engaged in deceptive acts and practices as prohibited by the provisions of the Kansas Consumer Protection Act, according to the AG’s office. It is also alleged that the manufacturers received unjust enrichment by knowingly, willfully and intentionally deceiving Kansas diabetics and receiving financial windfall from the insulin pricing scheme at the expense of Kansas diabetics.
Lastly, the lawsuit alleges the insulin manufacturers and the PBMs conspired by failing to disclose the details of their pricing structures, agreements and sales figures in order to maintain the secrecy of their scheme.
This lawsuit comes from an ongoing investigation into the practices and activities of PBMs in Kansas. That investigation started in 2020 and the lawsuit filed on Friday is the second it has produced. The AG’s office settled last year with Centene Corp. regarding its business practices in Kansas, recovering more than $27 million for Kansas.
Click here to look through the full lawsuit, click here.
Reporter: Matthew Self