California Lawmaker Says Insulin Maker Is in "Egregious Defiance" of Drug Pricing Law

Eli Lilly says that it will not comply with a 2017 California law on drug pricing, and now the state senator who sponsored the bill is hitting back against the drug manufacturer, calling the company’s activities to promote its diabetes programs “disingenuous and offensive.”

The law in question, SB 17, which was signed into law in October 2017, requires drug makers to provide to the state 60 days’ notice of price increases above 16% when combined with increases from the previous 2 years. Companies are also required to justify those increases, and insurers must provide information about how drug costs will affect premiums for health plan members. Drug companies are subject to a civil penalty if they do not comply.

In early 2018, Eil Lilly sent a letter to its registered purchases explaining that it was “not able” to provide the required information, and that it would await the outcome of a lawsuit challenging the constitutionality of the law before issuing any notices about its drug prices.

The lawsuit, filed by the pharmaceutical industry trade and lobbying group Pharmaceutical Research and Manufacturers of America (PhRMA), claims that the law would force drug makers “…to publicly convey and implicitly endorse the state’s position that the manufacturers are to blame for the allegedly inflated prices of prescription drugs,” and seeks a declaration that the law violates the First Amendment, the Fourteenth Amendment, and the Commerce Clause.

Read more about PhRMA’s challenge to SB 17.

Meanwhile, Lilly has launched a program that it calls its Diabetes Solution Center, a helpline with representatives who review financial options with patients who have difficulty paying for their insulin products.

Lilly’s refusal to comply with the law, coupled with its launch of the helpline, has drawn ire from State Senator Ed Hernandez, OD, a Democrat who represents the district of West Covina. Last month, Hernandez penned a letter to Eli Lilly’s chairman and CEO, David A. Ricks, saying, “Your company’s egregious defiance of state law makes your promotion of a ‘Diabetes Solution Center’ even more disingenuous and offensive. If you would simply comply with SB 17, Californians would know when you hike the price of insulin.”

The letter, which was cosigned by representatives of the California Labor Federation, Health Access California, and the labor union Unite Here went on to say that “Californians shouldn’t have to plead their case to telephone operators,” and asked the drug maker to “simply lower the price” that it charges for its insulin products.