Eli Lilly has agreed to pay $13.5 million to end a six-year, class-action lawsuit that alleged the company overpriced its insulin.
As part of the settlement, which was recorded (PDF) in a federal district court in New Jersey, Lilly has agreed to cap out-of-pocket costs for its insulin at $35 per month for four years.
The deal comes three months after the company said it would slash price of the type 1 diabetes treatment to the same level to “make it easier to access Lilly insulin and help Americans who may have difficulty navigating a complex healthcare system.”
Lilly’s initial move had come a month after President Joe Biden, in his State of the Union address, called on Congress to limit insulin costs for all patients to $35 per month. The Inflation Reduction Act already had limited insulin costs for patients on Medicare at $35 per month.
The lawsuit was filed in 2017, against insulin makers Lilly, Novo Nordisk and Sanofi. Plaintiffs claimed the companies joined in an “arms race” to raise list prices of their meds while the “real” price to pharmacy benefit managers remained constant or in some cases dipped. The companies did this, the suit claims, to leverage the growing “spread” between public and private prices and win favorable formulary positioning.
All of this was at the expense of patients, whose out-of-pocket expenses are based on a medicine’s list price, the suit says. Price increases of insulins that previously cost $25 per prescription were pushed up to $450, the suit said. The increases, taken in “lockstep,” were “astounding and inexplicable,” according to the class action lawsuit.
Earlier this year, within weeks of Lilly capping its out-of-pocket cost of insulin, Novo Nordisk and Sanofi did the same. Those companies have yet to settle this case.
Attorneys from two law firms claim that the settlement with Lilly is worth $500 million to consumers over the four-year period when prices are capped. Eligible claimants can receive cash payments based on their purchases of Lilly insulins and based on a formula set by the parties.
“This settlement will bring immense, forward-looking relief, especially for those who are underinsured or paying with co-insurance—those most in need of assistance,” said Steve Berman, managing partner of Hagens Berman, in a release.
The class-action case detailed accounts of patients resorting to extreme measures to survive rising insulin prices, including starving themselves to control their blood sugar levels, intentionally slipping into diabetic ketoacidosis to receive insulin samples from hospital emergency rooms, under-dosing insulin, and taking expired insulin.