Texas Attorney General Sues Insulin Manufacturers and Pharmacy Middlemen for High Costs

The Texas attorney general has sued major insulin manufacturers and pharmacy benefit managers (PBMs), accusing them of colluding to drive up the cost of insulin.

Texas Attorney General Ken Paxton’s office said Thursday that it has sued insulin makers Eli Lilly, Novo Nordisk and Sanofi.

The bureau also sued PBMs, including CVS’ Caremark, Cigna’s Express Scripts and UnitedHealth’s OptumRx, that act as middlemen in negotiating drug prices and coverage.

Why is it important?

The lawsuit targets both insulin manufacturers and PBMs. Previous action by US antitrust regulators targeted only PBMs.

The US Federal Trade Commission in September sued the same PBMs, accusing them of steering diabetes patients toward higher-priced insulin in order to secure millions of dollars in rebates from drug companies.

At the time, the FTC did not sue the insulin makers, but it had criticized their role in what it called a flawed system.

Context

In the Texas lawsuit, Paxton alleged that manufacturers artificially inflated insulin prices and then paid a significant, undisclosed portion back to PBMs for preferential treatment.

PBMs later granted preferred status to the manufacturer with the highest list prices while excluding lower-priced drugs, the attorney general’s press release said.

Key quote

“Big Pharma insulin makers and PBMs worked together to take advantage of diabetes patients and raise prices as much as they could,” Paxton said.

“Allegations that we play any role in determining the prices manufacturers charge for their products are false, and we intend to vigorously defend ourselves against this baseless lawsuit,” CVS said in an emailed statement.

“This lawsuit is without merit and ignores the reality of the current market,” UnitedHealth’s OptumRx said.

While Cigna did not provide a direct comment, the company referred Reuters to its Sept. 20 statement in which it said the FTC’s action related to insulin pricing is demonstrably without merit.

“Novo Nordisk believes the allegations in the lawsuit are without merit and we intend to vigorously defend against these claims,” ​​a company spokesman told Reuters.

“While we will not comment on the details of the allegations, Sanofi’s pricing practices have always complied with the law,” the French drugmaker said in an emailed statement.

Lilly did not immediately respond to requests for comment.

(Reporting by Singh and Sunny in Bengaluru; Editing by Mohammed Safi Shamsi)