Massachusetts AG Sues Insulin Makers and PBMs Over Alleged Price-Fixing Scheme

Massachusetts Attorney General Andrea Joy Campbell has filed a lawsuit in Suffolk Superior Court against three major insulin manufacturers—Eli Lilly, Sanofi, and Novo Nordisk—and pharmacy benefit managers (PBMs) Optum RX, Express Scripts, and CVS Caremark, accusing them of engaging in an unfair and deceptive pricing scheme that has driven up the cost of insulin for diabetics across the state.

According to a statement from the Attorney General’s office, the lawsuit claims that these companies collaborated to inflate insulin prices, harming hundreds of thousands of residents who rely on the life-saving medication. The manufacturers have allegedly raised insulin prices by up to 1,000% over the past decade, despite production costs remaining low.

“Insulin manufacturers and pharmacy benefit managers worked together to drive up prices and take advantage of vulnerable diabetes patients,” said AG Campbell. “Our lawsuit seeks to hold these companies accountable for their greed while protecting our consumers from exorbitant health care costs.”

The complaint highlights the rising cost of synthetic insulin, which was originally priced at around $20 when introduced in the 1990s but now ranges from $300 to $700 per vial. AG Campbell alleges that the manufacturers artificially inflated prices and shared undisclosed portions of their profits with PBMs as part of a quid pro quo arrangement to secure favorable positions on drug formularies, the lists used by PBMs to determine which medications are covered by insurance.

PBMs, which control roughly 80% of the pharmacy benefits market, have significant influence over which medications are available to consumers and at what cost. According to the complaint, the PBMs prioritized insulin products with the highest list prices while excluding more affordable options, further limiting patients’ access to lower-cost alternatives.

Related: Senator Warren Presses HUD Nominee on Rent Price-Fixing

State lawmakers praised the lawsuit as a necessary step toward greater accountability and transparency in the pharmaceutical industry. Senator Cindy Friedman expressed her support for the Attorney General’s actions, noting that while recent legislative efforts have capped out-of-pocket insulin costs and improved oversight, more needs to be done to address the opaque pricing practices of drug manufacturers and PBMs.

“While the Legislature recently capped out-of-pocket insulin costs and brought much-needed oversight and data collection requirements to pharmaceutical manufacturing companies and pharmacy benefit managers, so much is still unknown about drug pricing practices, and I am extremely grateful to Attorney General Campbell for taking this action,” said Friedman.

Representative John Lawn echoed those sentiments, emphasizing the need for increased scrutiny of PBMs’ practices. “I applaud Attorney General Andrea Campbell for bringing this lawsuit forward. The legislature is focused on the opaque business practices PBMs have created, which can lead to increased drug prices and limited transparency for consumers, employers, and pharmacies,” Lawn said.

The lawsuit sheds light on the financial hardships faced by Massachusetts residents living with diabetes. According to the American Diabetes Association, approximately 500,000 people in the state have diabetes, while another 1.8 million residents have prediabetes. The Centers for Disease Control and Prevention (CDC) reports that many individuals with diabetes are forced to ration insulin, use expired medications, or reuse needles due to the soaring costs of treatment.

Per the Attorney General’s complaint, the PBMs falsely claimed to use their market leverage to lower drug prices and improve access to affordable medications. However, the lawsuit alleges that their true actions have resulted in higher prices and limited access to cost-effective diabetic treatments, prioritizing profits over patient care.

Source: Mass Gov