Lilly's $13.5M insulin pricing settlement gets pushback from 9 states

Nine states are saying not so fast to a proposed $13.5 million settlement that would get Eli Lilly out of hot water over claims it jacked up the price of its lucrative insulin product Humalog. The states argue Lilly is trying to use the deal to ward off future lawsuits by U.S. states.

In a Tuesday filing in New Jersey federal court, lawyers for Arizona, Mississippi and Minnesota urged U.S. District Judge Brian Martinotti to delay approval of the deal unless it’s altered to make sure states can still file their own lawsuits over insulin prices.

The states joined Illinois, Nebraska, Utah, Arkansas, Kansas and Montana in making their objections known this week.

In a separate filing Monday, the group of six states argued that in light of local insulin price caps, Lilly was trying to settle claims valued at about $1 billion by offering price reductions that are already compelled by law.

Lilly sought approval for its settlement in May in a bid to resolve litigation dating back to 2017. In addition to offering up $13.5 million, Lilly agreed to cap monthly out-of-pocket insulin costs at $35 for four years.

But the Inflation Reduction Act already caps out-of-pocket insulin costs for Medicare beneficiaries at $35, the six states pointed out.

In their Tuesday filing, Arizona, Mississippi and Minnesota claim the settlement is a "brazen attempt" to restrict future litigation. The deal "threatens the sovereign interests of states," they argued.

Eli Lilly did not immediately respond to a request for comment on the situation.

In the original lawsuit, people who paid out-of-pocket for Lilly’s insulin Humalog accused the company, plus Sanofi and Novo Nordisk, of inflating the drug’s list price while offering steep discounts to pharma middlemen who determine what drugs are available through insurance plans.

Lilly agreed to the settlement in May after years of defending against the allegations. 

Also this year, meanwhile, Lilly led the charge on an insulin price-slashing campaign, cutting the price of its most commonly prescribed insulins by 70%. Moreover, the company expanded its Insulin Value Program to cap patient out-of-pocket costs at $35 or less per month. 

Humalog is subject to a 70% price cut effective in the fourth quarter of 2023. Currently, Lilly lists the cost of a five-pack of Humalog pens at $530.40 before discounts, while a vial of insulin runs for about $274.

While the Inflation Reduction Act caps monthly out-of-pocket costs at $35 for Medicare beneficiaries, lawmakers in Congress have proposed legislation to make that cap apply to all diabetics in the U.S.