California sues largest US insulin manufacturers and PBMs for overpricing

The state of California in the US is suing the nation’s largest insulin manufacturers and pharmacy benefit managers (PBMs) for allegedly using their market power to overcharge patients for the life-saving drug, the state's attorney general Rob Bonta announced.

Eli Lilly, Novo Nordisk and Sanofi produce over 90% of the global insulin supply and the PBMs CVS Caremark, Express Scripts and OptumRx administer pharmacy benefits for around 80% of prescription claims managed.

The lawsuit, filed in the California Superior Court in Los Angeles, argues that because competition is highly limited in both their markets, these six companies are able to keep ‘aggressively hiking’ the list price of insulin at the expense of patients, violating the state's Unfair Competition Law.

According to a 2021 Congressional report, Eli Lilly, Novo Nordisk and Sanofi have raised the price of their insulin by 1,219%, 627% and 715%, respectively, since they were first launched.

“Insulin is a necessary drug that millions of Americans rely upon for their health, not a luxury good,” said Bonta. "With today's lawsuit, we're fighting back against drug companies and PBMs that unacceptably and artificially inflate the cost of life-saving medication at the expense of vulnerable patients.”

The California Health and Human Services Agency reported this year that, according to national data, as many as one in four diabetics cannot afford their insulin, forcing them to ration or stop taking insulin altogether.

A statement issued by the attorney general’s office adds that those from low-income households and some racial and ethnic groups are disproportionately impacted by the practices.

This includes Hispanic and black people, who are much more likely to be diagnosed with type 2 diabetes than non-Hispanic white people, and more likely to die as a result of complications from it.

Through the lawsuit, California is seeking to control the cost of insulin by promoting price competition and eliminating ‘unlawful, unfair and deceptive practices’, as well as to recover restitution for past overpayments for the drug.

Other states including Minnesota, Mississippi, Arkansas and Kansas, as well as groups of drug purchasers, have previously brought legal action over insulin pricing.

“No one should be forced to ration or go without basic medication that could mean the difference between life or death. California will continue to be a leader in the fight to ensure everyone has equal access to affordable healthcare and prescription medications they need to stay healthy,” Bonta added.