Diabetes patients filed a class action lawsuit on Jan. 30 against three major drug companies, alleging price fixing for insulin treatments.
The lawsuit, filed in the U.S. District Court for Massachusetts, claims that Sanofi, Novo Nordisk A/S and Eli Lilly & Co. raised their benchmark prices "in lock step" while keeping discounted prices for bulk drug distributors low, resulting in higher margins for both sides and doing away with typical competitive pricing.
Plaintiffs allege that in the past five years, the three drug companies raised their benchmark prices more than 150%, leading some patients to pay $900 per month for their treatments.
It is common for pharmacy benefit managers, the main drug distributors, to negotiate undisclosed lower prices. The suit claims that as compensation for their role as a negotiator, the PBMs pocket a percentage of the difference between the reported benchmark price and the undisclosed real price they secure.
In an email, lead attorney Steve Berman of Hagens Berman Sobol Shapiro LLP said there was a possibility that the firm would include PBMs in the lawsuit after it obtains discovery or additional information during the pre-trial process.
According to the suit, which seeks class-action status, Express Scripts, CVS Health and OptumRx control more than 80% of their market, covering 180 million insured people.
Express Scripts spokesman Brian Henry said in an email that the company would not comment on the lawsuit, but that "rebates don't raise drug prices, drug makers raise drug prices."
Novo Nordisk and Eli Lilly both disputed the claims.
"We disagree with the allegations made against the company, and are prepared to vigorously defend the company in this matter," Ken Inchausti, Novo Nordisk director of media relations, told S&P Global Market Intelligence in an email.
Eli Lilly director of communications Gregory Kueterman said the company ensures compliance with all applicable laws.