Penn State sues insulin makers, health care companies over medication prices
Penn State is suing a number of major insulin makers and other large health care companies, alleging they participated in an insulin pricing scheme and as a result, the university has been overcharged by millions of dollars.
A lawsuit Penn State filed in the U.S. District Court of New Jersey on Jan. 13 names defendants Eli Lilly, Novo Nordisk and Sanofi ( manufacturers of insulin and other diabetes medications), CVS Caremark, Express Scripts, and OptumRx (pharmacy benefit managers) and others. The lawsuit alleges that for the last 20 years, list prices for insulin medications, set by the manufacturers, have increased even though the cost of production has decreased.
The lawsuit alleges prices of insulin went up because the manufacturers and pharmacy benefit managers profited from higher list prices and hidden rebates.
It can cost a manufacturer as low as $2 to produce a vial of insulin, the lawsuit states, yet a vial that cost $20 in the 1990s now costs between $300 and $700. It says the manufacturers have increased their insulins “in tandem,” and even made the same increases down to the decimal point within a few days of each other.
Penn State alleges it has been overcharged millions of dollars since 2008.
“As a payor for and purchaser of the at-issue drugs, Plaintiff has been overcharged millions of dollars during the relevant period as a direct result of the Insulin Pricing Scheme,” the lawsuit states, noting that a substantial portion of the overcharges are attributable to “artificially inflated prices” of the drugs, thanks to undisclosed conduct from the named manufacturer and PBM defendants.
Penn State claims that the alleged insulin pricing scheme caused increased spending at the university, which has a detrimental effect on its budget and negatively impacts its ability to provide services to students, faculty, staff and the community.
“Plaintiff incurs significant costs by paying a substantial portion of the price of diabetes medications for its health-plan members. Accordingly, during the relevant period, and to the detriment of its beneficiaries, Plaintiff has paid substantially more for insulin than it otherwise would have paid absent Defendants’ Conduct,” the lawsuit states.
Penn State is seeking to recover “up to three times to actual damages sustained,” although a specific dollar amount was not listed, and other costs. It also asks for a trial by jury.
