Mississippi seeks restitution for high insulin prices
Citing the cost burden of steadily rising insulin prices on the people of Mississippi, State Attorney General Lynn Fitch has filed a lawsuit against the major producers and pharmacy benefit managers (PBMs) that produce and distribute insulin, alleging that they operate an “insulin pricing system” designed to rip off patients and payers and generate ever higher profits in the absence of stiff competition.
“Diabetes is an epidemic in Mississippi,” Fitch said in the lawsuit filed with Hinds County Chancellery Court in Jackson. More than 400,000 people, or 13.6%, of the population of the state of Mississippi live with diabetes and another 750,000 are prediabetics with high blood sugar that puts them at risk of developing diabetes. To treat diabetics, the state spends $ 3.5 billion a year, which Fitch says is $ 1 in 4 spent on health.
With so many people dependent on insulin for their good health and survival, they are very vulnerable to price increases in popular insulin products that have been well over 1,000% over the past 10 years, says Fitch. Many in the state skip or do without insulin treatments, risking serious health problems or death, she argues.
His trial is not the first attempt to free insulin from the near-monopoly conditions that make such price increases possible. In recent years, insulin makers have been hit with racketeering allegations and at least 1 class action lawsuit filed by diabetic patients claiming they were scammed by drug makers.
By using alternative means to lower prices, lawmakers and regulators in the United States have attempted to foster more competition for insulin. In 2020, insulin product approvals were moved under the regulatory path of the Biologics Pricing Competition and Innovation Act (BPCIA).
It is possible that as early as this year, Semglee, a product previously approved as a follow-up copy of Sanofi’s Lantus brand long-acting insulin, could be approved as a biosimilar under BPCIA, which would strengthen its profile and, potentially, its commercial reach in the United States.
However, there is debate as to whether the BPCIA pathway will lead to stiff competition for insulin and lower the price scaffolding erected by the Big 3 – Sanofi, Novo Nordisk and Eli Lilly – that dominate the market.
In a recent discussion at the Festival of Biologics, expert panelists said the barriers are high for potential insulin producers to establish themselves in the United States. Despite being a simple biologic, insulin is difficult to produce with consistent quality in high volumes, and small producers would struggle to find the resources to do so, they said.
Without large-scale production by competing producers, it is possible that the high prices of insulin products will continue unabated.
The Mississippi lawsuit names insulin producers Eli Lilly, Novo Nordisk and Sanofi as defendants, along with PBM CVS Caremark, Express Scripts and OptumRx. The business of PBMs is so closely tied to that of insulin manufacturers that it cannot be said that PBMs are not benefiting from extremely high insulin prices or price increases, Fitch says.
“Defendant manufacturers artificially and intentionally increase their prices, then reimburse a significant portion of that price to PBMs” in disguised payment categories so as not to appear as additional price increase payments, alleges Fitch. “The defendant manufacturers are able to make these secret payments to purchase the preferred form position, which significantly increases their revenue, without sacrificing their profit margins.”
The Center for Biosimilars® asked for comment from a number of defendants listed in the lawsuit, not all of whom responded by the press deadline.
Novo Nordisk said the claims were false. “We are aware of the complaint and do not agree with the allegations made against the company. We defend ourselves vigorously in these cases, ”the company said. “We have a long-standing commitment to supporting patient access to our medicines. Novo Nordisk said due to the dispute it could not comment further.
CVS’s response to the lawsuit asserted that the allegations “are based on a false premise and completely unfounded.” CVS blamed the high prices of insulin on drug companies. “Nothing in our agreements prevents drug companies from lowering the prices of their insulin products, and we would welcome such action. The claims that Caremark plays a role in determining the prices that manufacturers charge for their products are false, and we intend to vigorously defend ourselves against this baseless lawsuit.
Fitch in his costume described the practice of competing insulin producers raising prices by almost the same increments at almost the same time, resulting in a escalation effect where there is little price difference from product to product. other. This forces healthcare consumers to pay almost the same price for insulin whether they buy it from producer A or producer B and bought it in 2012 or 2020.
Prices for comparable long-acting insulin products Lantus SoloStar (Sanofi) and Levemir FlexPen (Novo Nordisk) were both around $ 200 by average wholesale price in 2009 and between $ 500 and $ 550 in 2020, according to the pursuit.
A similar price effect was noted for the parent products adalimumab and etanercept (Humira and Enbrel respectively), for which the annual costs fell from the level of $ 13,590 in 2003 to $ 77,590 in 2021, according to a May 2021 report released by House members. Control and Reform Commission. The report made similar allegations about the price behavior of the initiating companies and called for a Federal Trade Commission antitrust investigation into AbbVie.
The Mississippi lawsuit demands $ 10,000 in civil penalties “for each purchase of an implicated diabetes drug.”