- The Commonwealth of Kentucky on Wednesday filed a lawsuit against major pharmacy benefit managers and drug manufacturers, becoming the latest state to wage a court battle over rising insulin prices.
- The lawsuit alleges that PBMs CVS Caremark, Express Scripts and OptumRx — along with manufacturers Novo Nordisk, Eli Lilly and Sanofi — utilize their collective market power to artificially inflate insulin prices in a scheme to reap profits. The PBM defendants control approximately 80% of the market and are owned by the nation’s largest health insurers.
- Other states and cities have filed lawsuits this year against PBMs and drug manufacturers over rising insulin prices. Last week, the city of Cleveland filed suit against the same defendants, alleging that PBMs and drugmakers create insulin prices “untethered” from fair market value.
The legal battles over insulin come as lawmakers scrutinize the drug middlemen for their role in rising drug prices.
Congressmen have accused PBMs of price gouging by utilizing rebates and other mechanisms to obfuscate and ultimately drive up drug prices. Calls for greater price transparency come as the federal government prepares to begin negotiating drug costs through Medicare in 2025 in a historic bid to lower prices.
Although PBMs say their job is to lower drug prices by negotiating rates, creating formularies and reimbursing pharmacies, the Kentucky lawsuit alleges that PBMs and manufacturers work in tandem to raise insulin prices, creating a “devastating” physical, financial and emotional toll for the over 450,000 Kentuckians with diabetes.
“Unable to afford the drugs their doctors prescribe, many diabetics ration or under-dose their insulin, inject expired insulin, reuse needles and starve themselves to control their blood sugars,” the lawsuit states. “This behavior is extremely dangerous and has led to serious complications or even death.”
Recent court battles have centered on cost increases for life-saving drugs like insulin. In January, California filed suit against the same PBM and manufacturer defendants for rising insulin prices, one year after Gov. Gavin Newsom announced that the state would allocate $100 million to develop and manufacture its own biosimilar insulin products for Californians.
Estimates by the Centers for Disease Control and Prevention peg diabetes as the most expensive chronic condition in the country and predict that one in three Americans will develop the condition in their lifetime.
In Kentucky, the total estimated cost of diabetes is $3.6 billion per year, with one of every four healthcare dollars spent on people with the condition, according to the lawsuit.