Arizona Attorney General Kris Mayes is suing insulin manufacturers and pharmacy benefit managers for allegedly inflating the price of insulin and keeping excess profits.
Drug manufacturers pay pharmacy benefit managers, or PBMs, a rebate in exchange for higher priority on their drug formulary. A formulary is a list of medications and their prices available to patients under their health insurance.
And although they were originally created to try to decrease the cost of prescription drugs for consumers, pharmaceutical companies blame PBM rebates as the reason they have to keep increasing prices.
And in the case of insulin, the lawsuit alleges that the named companies artificially inflated the list prices of insulin and then paid a significant portion of the inflated price back to the PBMs in exchange for higher priority on the formularies.
“Despite promises to pass along the increased rebates to health insurers and patients, the PBMs instead used complex financial and business structures to keep a large part of the inflated profits for themselves,” the Attorney General’s office wrote in a press release.
The lawsuit is seeking civil penalties from three PBMs: CVS Caremark, Express Scripts, and OptumRx, and three insulin manufacturers; Novo Nordisk Inc., Sanofi-Aventis U.S. LLC, and Eli Lilly and Company.
According to the lawsuit, the price of insulin has increased disproportionately to other goods and services in the last 20 years. The same vial of insulin that cost $20 in 1990 can now be listed as high as $700.
The suit would also force the companies to give up their excess profits from insulin sales.