\n\tAngela Hart and Samantha Young<\/span><\/p>\n

California Attorney General Rob Bonta on Thursday sued the six major companies that dominate the U.S. insulin market, ratcheting up the state\u2019s assault on a profitable industry for artificially jacking up prices and making the indispensable drug less accessible for diabetes patients.\u00a0<\/p>\n

The 47-page civil complaint<\/a> alleges three pharmaceutical companies that control the insulin market \u2014 Eli Lilly and Co., Sanofi, and Novo Nordisk \u2014 are violating California law by unfairly and illegally driving up the cost of the drug. It also targets three distribution middlemen known as pharmacy benefit managers: CVS Caremark, Express Scripts, and OptumRx.\u00a0<\/p>\n

\u201cWe\u2019re going to level the playing field and make this life-saving drug more affordable for all who need it, by putting an end to Big Pharma\u2019s big profit scheme,\u201d Bonta said at a news conference after filing the lawsuit in a state court in Los Angeles. \u201cThese six companies are complicit in aggressively hiking the list price of insulin, at the expense of patients.\u201d\u00a0<\/p>\n

In the lawsuit, Bonta argued that prices have skyrocketed and that some patients have been forced to ration<\/a> their medicine or forgo buying insulin altogether. The attorney general said a vial of insulin, which diabetics rely on to control blood sugar, cost $25 a couple of decades ago but now costs about $300.\u00a0<\/p>\n

A 2021 U.S. Senate investigation<\/a> found that the price of a long-acting insulin pen made by Novo Nordisk jumped 52% from 2014 to 2019 and that the price of a rapid-acting pen from Sanofi shot up about 70%. From 2013 to 2017, Eli Lilly had a 64% increase on a rapid-acting pen. The investigation implicated drug manufacturers and pharmacy benefit managers<\/a> in the increases, saying they perpetuated artificially high insulin prices.\u00a0<\/p>\n

\u201cCalifornia diabetics who require insulin to survive and who are exposed to insulin\u2019s full price, such as uninsured consumers and consumers with high deductible insurance plans, pay thousands of dollars per year for insulin,\u201d according to the complaint.\u00a0<\/p>\n

Eli Lilly spokesperson Daphne Dorsey said the company is \u201cdisappointed by the California attorney general\u2019s false allegations,\u201d arguing that the average monthly out-of-pocket cost of insulin has fallen 44% over the past five years, and the drug is available to anyone \u201cfor $35 or less.\u201d\u00a0<\/p>\n

OptumRx, a division of UnitedHealthcare, said it welcomes the opportunity to show California \u201chow we work every day to provide people with access to affordable drugs, including insulin.\u201d And company spokesperson Isaac Sorensen said it has eliminated out-of-pocket costs for insulin.\u00a0<\/p>\n

Other companies targeted in the suit, and the trade associations that represent them, did not immediately respond to inquiries seeking comment, or declined to comment on the lawsuit. Instead, they either blamed one another for price increases or outlined their efforts to lower costs. Costs for consumers vary widely depending on insurance coverage and severity of illness.\u00a0<\/p>\n

California follows other states, including Arkansas<\/a>, Kansas<\/a>, and Illinois<\/a>, in going after insulin companies and pharmaceutical middlemen, but Bonta said California is taking an aggressive approach by charging the companies with violating the state\u2019s Unfair Competition Law, which could carry significant civil penalties and potentially lead to millions of dollars in restitution for Californians.\u00a0<\/p>\n

If the state prevails in court, the cost of insulin could be \u201cmassively decreased\u201d because the companies would no longer be allowed to spike prices, Bonta said.\u00a0<\/p>\n

Bonta joins fellow Democratic leaders in targeting the pharmaceutical industry. Gov. Gavin Newsom has launched an ambitious plan to put the nation\u2019s most populous state in the business of making its own brand of insulin<\/a> as a way to bring down prices for roughly 3.2 million diabetic Californians<\/a> who rely on the drug.\u00a0<\/p>\n

\u201cBig Pharma continues to put profits over people \u2014 driving up drug prices and restricting access to this vital medicine,\u201d Newsom spokesperson Brandon Richards told KHN. \u201cThat is why California is moving towards manufacturing our own affordable insulin.\u201d\u00a0<\/p>\n

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California is going to make its own insulin. It\u2019s simple. People should not go into debt to get life-saving medication. pic.twitter.com\/yB4mpGjtQO<\/a><\/p>\n
\u2014 Gavin Newsom (@GavinNewsom) July 7, 2022<\/a><\/p><\/blockquote>\n
By launching an aggressive attack against the pharmaceutical industry, California is also wading into a popular political fight. Many Americans express outrage at drug costs while manufacturers blame pharmacy middlemen and health insurers. Meanwhile, the middlemen point the finger back at drugmakers.\u00a0<\/p>\n
Edwin Park, a California-based research professor with Georgetown University\u2019s Center for Children and Families, said California\u2019s push to enter the generic drug business, while also suing the pharmaceutical industry, could ultimately lead to lower patient costs at the pharmacy counter.\u00a0<\/p>\n
\u201cIt can put downward pressure on list prices,\u201d Park said, referring to the sticker price of drugs. \u201cAnd that can lead to lower out-of-pocket costs.\u201d\u00a0<\/p>\n
There isn\u2019t much transparency in how drug prices are set in the U.S. Manufacturers are predominantly to blame for high drug costs, because they set the list prices, Park said. A growing body of research also indicates that the pharmaceutical middlemen are a prime driver of high patient drug costs. To lower prices, it\u2019s critical to target the entire supply chain, experts say.\u00a0<\/p>\n
\u201cThe list price has definitely gone up,\u201d said Dr. Neeraj Sood, a professor of health policy, medicine, and business at the University of Southern California who has studied drivers of high insulin costs<\/a>. \u201cBut over time a larger share of the money is going to the middlemen rather than the manufacturers.\u201d\u00a0<\/p>\n
This story was produced by KHN<\/a>, which publishes California Healthline<\/a>, an editorially independent service of the California Health Care Foundation<\/a>.<\/em><\/p>\n
KHN<\/a> (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF<\/a> (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.<\/p>\n
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