Eli Lilly facing consumer-fraud allegations for soaring insulin prices
NEW JERSEY. — Eli Lilly and two other insulin makers are facing accusations they spiked prices of their life-preserving drug through deceptive price lists.
According to Bloomberg, U.S. District Judge Brian Martinotti in New Jersey will allow a proposed class-action suit to proceed against Eli Lilly & Company, Novo Nordisk A/S, and Sanofi, a French drug manufacturer who has a unit in the U.S. The lawsuit, filed by 67 diabetics, accuses the companies of inflating prices.
Martinotti has seen more cases in his court filed by diabetics accusing insulin makers of price gouging, Bloomberg reported. Plaintiffs claim companies are unlawfully raising insulin prices in order to provide rebates for pharmacy-benefit managers who choose which drugs end up on preferred insurance lists.
“This ruling blows the insulin racket wide open,” Steve Berman, a lawyer for one of the plaintiffs, told Bloomberg. The ruling “clears the way for us to begin obtaining discovery from the manufacturers and PBMs so we can shine the light on exactly what has driven insulin prices sky-high.”
Eli Lilly spokesman Gregory Kueterman told Bloomberg he couldn’t comment on the judge’s decision. However, he said the company would continue to defend itself against the allegations.
The suit claims companies raised insulin sticker prices by over 150% during the last five years, which forced diabetics to abandon the drug, take lower doses or turn to expired insulin. Some patients failed to take appropriate amounts so they could go the emergency room to get free insulin samples, the complaint noted.
According to Bloomberg, the suit centers around companies’ alleged deceptive pricing practices. Diabetics say insulin makers’ sticker prices differ from the prices insurers pay after discounts have been applied to pharmacy-benefit managers. Plaintiffs insist the rebates amount to kickbacks for the benefit managers, who recommend which drugs insurers should cover. Larger list prices equate to higher-percentage rebates, leading to a larger cut for pharmacy-benefit managers.
Martinotti decided patients could continue with allegations that the rebate system violates consumer-protections laws.