Insulin makers have faced no shortage of scrutiny in recent years over escalating prices, and now Minnesota Attorney General Lori Swanson is the latest to file a legal salvo against Sanofi, Novo Nordisk and Eli Lilly for alleged “deceptive” price hikes.
In the suit, filed in federal court in New Jersey, Swanson argues that the companies have raised list prices so high over the years that they’re not an “accurate approximation of the true cost of insulin” and are misleading. She said the companies have engaged in a race to increase their list prices—at the same time increasing rebates—to secure favorable formulary placement from payers.
But while payers don’t pay the entire list price, Swanson says uninsured and underinsured patients suffer because they pay based off of sticker prices. There are about 350,000 Minnesotans without insurance and nearly 10% of the state’s population has diabetes, according to the attorney general.
The lawsuit targets Sanofi’s Lantus, Novo Nordisk’s NovoLog, Eli Lilly’s HumaLog and more. Swanson seeks injunctive and monetary relief for patients in the state who paid out of pocket for insulin.
Spokesmen for Sanofi and Eli Lilly said the lawsuit is without merit and that the companies will defend against it "vigorously." A Novo Nordisk representative said the company takes the matter seriously and is examining the allegations.
“As a company committed to ethics and compliance in how we support patients, we ensure that our business practices are consistent with legal and regulatory requirements,” Novo's representative said.
Swanson's suit is far from the first time the companies have faced accusations of illegal pricing. Last year, plaintiffs filed a class action lawsuit against the companies making similar arguments. In that suit, the plaintiffs said the companies engaged in an “arms race” to raise list prices while net prices remained the same or even dropped in some cases. Again, the plaintiffs said the companies did so in order to win favorable formulary placement.
Aside from that suit, the companies have been a frequent target for politicians looking to bring attention to drug pricing and have faced numerous investigations into insulin pricing.