RICHMOND, Va. (WRIC) – Over 743,000 Virginians have been diagnosed with diabetes and many of those depend on live-saving insulin to survive. 

However, a new lawsuit filed by the governments of Henrico County and the City of Alexandria alleges that people may have been forced to pay more for their medication thanks to an “unfair and deceptive conspiracy.” 

“The price determination mechanism isn’t transparent and it’s not clear as to why these prices have been going up,” Dr. David Bieri, an Associate Professor of Urban Affairs at Virginia Tech University explained. 

The lawsuit alleges that all three major insulin manufacturers, Eli Lilly, Novo Nordisk, and Sanofi, conspired with companies that manage prescription drug programs for commercial insurers, known as pharmacy benefit managers, or PBMs. Some of the PBMs listed as defendants include Evernorth Health/Express Scripts, CVS Caremark, and OptumRx.

According to the lawsuit, “each PBM maintains a list of covered medications.”

The lawsuit says, “For insulin, however, to gain access to the PBMs’ formularies, the Manufacturers artificially inflate their list prices and then pay a significant, yet undisclosed, portion of that inflated prices back to the PBMs. 

“We also have to live with a whole host of what some politicians have called middlemen rip off artists in the form of pharmacy benefit managers that make the whole price setting system very difficult,” said Bieri. 

The lawsuit says that despite costing manufacturers as little as $2 to make, a vial of insulin now costs anywhere from $300-$700. 

Insulin Manufacturers Respond: 

Eli Lilly: 

“These complaints are baseless and should be dismissed, just like cases brought by other local governments have been. It’s the local governments filing these lawsuits—not Lilly—who decide the terms of the rebate arrangements they now say are improper, including whether to pass rebates on to people who take insulin.

Lilly has been working for years to reduce insulin out-of-pocket costs for people with diabetes, against the headwinds of a healthcare system that incentivizes others—like the parties filing these lawsuits—to choose higher list-price medicines over lower-priced options. Lilly was the first and still only company to cap what people pay at $35 per month for all of our insulins, and the average monthly out-of-pocket cost for Lilly insulin is even lower, $20.48. Recently, we announced we are cutting insulin prices by 70% and automatically capping monthly out-of-pocket costs at $35 or less wherever possible, which should drive that average even lower. We encourage anyone who wants more information about $35 Lilly insulin to call the Lilly Diabetes Solution Center at (833) 808-1234 or go to insulinaffordability.com to learn more and get help.”

Novo Nordisk:

“Novo Nordisk believes that the allegations in the lawsuit are without merit, and we intend to vigorously defend against these claims. While we will not comment further about ongoing litigation, we recognize that not all patient situations are the same and we have a number of different insulin affordability offerings available through NovoCare. Importantly, we continually review and revise our offerings as well as work with diverse stakeholders to create solutions for differing patient needs.  

Effective September 13, 2023, a $35.00 insulin option called MyInsulinRxTM is available from Novo Nordisk Inc for eligible patients. The program builds on existing Novo Nordisk insulin affordability options and is intended to further lower out-of-pocket costs for eligible people living with type 1 and type 2 diabetes.”

Sanofi: 

“While we will not comment on the specifics of the allegations, Sanofi’s pricing practices have always complied with the law and the company is committed to helping patients access the medicine they need at the lowest possible price.  

Following through on that commitment requires Sanofi to navigate a complex environment. Under the current system, fees and savings negotiated by health insurance companies and PBMs through rebates are not consistently passed through to patients in the form of lower co-pays or coinsurance. As a result, patients’ out-of-pocket costs continue to rise while – between 2012 and 2022 – the average net price of our insulins declined by 58%.

Sanofi believes that no one should struggle to pay for their insulin, regardless of their insurance status or income level, which is why we have a suite of innovative and patient-centric savings programs to help people reduce their prescription medicine costs.”

PBM’s Respond: 

CVS Caremark: 

“Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture.  Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products and we would welcome such an action.  Allegations that we play any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit.”

Optum Rx: 

“We have long been focused on lowering the net cost of prescription drugs, including insulin. Our clients and consumers count on us to be a counterweight to the substantial market power of manufacturers, which have sole discretion in setting and raising prices for their products. This lawsuit is without merit and we will defend against these allegations.”

8News reached out to Evernorth Health/Express Scripts, but did not hear back.