Mississippi Seeks Restitution for High Insulin Prices


The Mississippi attorney general takes on major insulin producers and pharmacy benefit managers in a suit alleging a massive pricing scheme to gouge patients and payers.

Citing the cost burden of ever-rising insulin prices on the people of Mississippi, state Attorney General Lynn Fitch has filed suit against major producers and pharmacy benefit managers (PBMs) that produce and distribute insulin, alleging they are running a massive “insulin pricing scheme” designed to gouge patients and payers and leverage higher and higher profits in the absence of strong competition.

“Diabetes is an epidemic in Mississippi,” Fitch says in the complaint filed with the Hinds County Chancery Court in Jackson. Over 400,000 people, or 13.6%, of the Mississippi state population is living with diabetes and 750,000 more are prediabetics with high blood sugar levels that put them at risk of becoming diabetics. To treat diabetics, the state shells out $3.5 billion per year, which Fitch says represents 1 in 4 health dollars spent.

With so many dependent on insulin for good health and survival, they are highly vulnerable to price increases for popular insulin products that have well exceeded 1000% over the past 10 years, Fitch says. Many in the state skip insulin treatments or go without, at risk of severe health problems or death, she contends.

Her lawsuit is not the first attempting to liberate insulin from the near monopolistic conditions that make such price increases possible. In recent years, insulin makers have been hit by racketeering allegations and at least 1 class action suit by patients with diabetes contending they have been gouged by drugmakers.

Using alternate means to lower prices, lawmakers and regulators in the United States have attempted to foster more insulin competition. In 2020, insulin product approvals were moved under the Biologics Price Competition and Innovation Act (BPCIA) regulatory pathway.

It is possible that as early as this year, Semglee, a product previously approved as a follow-on copy of Sanofi’s Lantus-brand long-acting insulin, could be approved as a biosimilar under the BPCIA, which would boost its profile and, potentially, its marketing reach in the United States.

However, there is debate whether the BPCIA pathway will lead to robust insulin competition and bring down the price scaffolding erected by the big 3—Sanofi, Novo Nordisk, and Eli Lilly—which dominate the market.

Because the PBMs base the price they charge for the at-issue diabetes medications on the manufacturer’s price, the more the manufacturers inflate their prices, the more money the PBMs make.

In a recent discussion at The Festival of Biologics, expert panelists contended the barriers are high for would-be insulin producers to establish themselves in the United States. Although a simple biologic, insulin is difficult to produce with consistent quality in high volumes, and smaller producers would be challenged to find the resources to do this, they said.

Without large-scale production by competing producers, it’s possible the high prices for insulin products will continue unabated.

The Mississippi suit names insulin producers Eli Lilly, Novo Nordisk, and Sanofi as defendants, along with PBMs CVS Caremark, Express Scripts, and OptumRx. The activity of PBMs is so intertwined with insulin manufacturers that it cannot be said that PBMs do not profit from the extremely high prices of insulin or the price increases, Fitch contends.

Allegations that Caremark plays any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit.

“Manufacturer defendants artificially and willingly raise their prices, and then pay a significant portion of that price back to the PBMs” in categories of payments that are disguised to not appear like complementary price increase payments, Fitch alleges. “Manufacturer defendants are able to make these secret manufacturer payments to buy preferred formulary position, which significantly increases their revenue, without sacrificing their profit margins.”

The Center for Biosimilars® reached out for comment to a number of defendants listed in the suit, not all of whom responded by press deadline.

Novo Nordisk said the allegations are false. “We are aware of the complaint and disagree with the allegations made against the company. We are vigorously defending ourselves in these matters,” the company said. “We have a longstanding commitment to supporting patients’ access to our medicines.” Novo Nordisk said that due to the litigation it could not comment further.

CVS’ response to the suit contended the allegations “are built on a false premise and completely without merit.” CVS placed the blame for high insulin prices on pharmaceutical companies. “Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products, and we would welcome such an action. Allegations that Caremark plays any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit.”

Fitch in her suit described the practice of competing insulin producers increasing prices by almost the same increments at almost the same time, resulting in a staircase effect where there is little price differential from 1 product to the next. This compels health care consumers to pay almost the same price for insulin whether they buy it from producer A or producer B and whether they bought it in 2012 or 2020.

Prices of the comparable long-acting insulin products Lantus SoloStar (Sanofi) and Levemir FlexPen (Novo Nordisk) both were roughly $200 by average wholesale price in 2009 and in the $500 to $550 range in 2020, according to the suit.

A similar pricing effect was noted for the adalimumab and etanercept originator products (Humira and Enbrel, respectively), for which annual costs have climbed from the $13,590 level in 2003 to $77,590 by 2021, according to a May 2021 report issued by members of the House Committee on Oversight and Reform. The report made similar allegations about pricing behavior by originator companies and called for a Federal Trade Commission antitrust investigation into AbbVie.

The Mississippi suit demands $10,000 in civil penalties "for each purchase of an at-issue" diabetes medication.

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