Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Attorney General Todd Rokita has taken aim against multiple drug companies and pharmacy benefit managers over insulin prices with a new lawsuit filed in Lake Superior Court.
The case–State of Indiana v. Sanofi-Aventis U.S. LLC; Novo Nordisk Inc.; CaremarkPCS Health LLC; Caremark LLC; Espress Scripts Asministrators LLC d/b/a Express Scripts; CVS Health Corp; OptumRx Inc., 45D05-2403-PL-000208– was filed Tuesday.
“We believe, we have alleged, and we will prove that they have taken advantage of people with serious medical conditions like diabetes,” Rokita said at a press conference Tuesday evening.
Eli Lilly and Company was not included in the list of defendants. When questioned, Rokita said that was because the office was working with the drug manufacturer.
In footnote four of the complaint it stated that it “is part of the conduct described herein but (1) is communicating with the State regarding these allegations and (2) has been proactive in reducing the cost of insulin.”
The complaint stated that, according to the American Diabetes Association, about 640,435 Hoosiers have been diagnosed with diabetes and that the number represents 12.3% of adults in Indiana. It also stated that diabetes is the seventh leading cause of death in Indiana.
“Soaring insulin prices have also left numerous diabetics unable to afford their medication at all. Many diabetics in Indiana are forced to ration or under-dose their insulin, inject expired insulin, reuse needles, and starve themselves to control their blood sugars. These behaviors are extremely dangerous and can lead to serious complications and death,” the complaint stated.
The complaint alleges the defendants violated the Indiana Deceptive Consumer Sales Act, Indiana Antitrust Act and the Indiana Medicaid False Claims Act and requests injunctive relief, restitution, civil penalties, costs, and attorney fees.
It alleges the defendants have intentionally and falsely misled the state regarding the costs and amounts paid for diabetes medications
“Using to their advantage and helping to perpetuate an opaque system of contracts regarding the provision of pharmacy services such that payments and services can be misrepresented and hidden due to the lack of transparency,” the complaint stated.
The lawsuit further alleged the companies have caused financial and physical harm to Indiana consumers.
Secondly, the complaint stated violations under the Indiana Medicaid False Claims Act.
“Defendants manipulated and concealed pricing records in order to cause false and fraudulent claims for reimbursement from the state’s Medicaid program to be submitted for prescription drugs whose costs it knew were being misrepresented and concealed through a series of opaque contracts hiding false pricing that Defendants themselves created in violation of Indiana Code § 5-11-5.7-1 et seq,” the complaint stated.
The lawsuit stated that in addition to actual damages, the state is entitled to all civil fines and penalties proscribed since the defendants allegedly violated the state’s prohibition against improper payments. It also alleged that defendants shall pay all interest and costs to the state.
Lastly, the state claims the defendants have violated the Indiana Antitrust Act as well for high diabetes medication prices.
“The financial benefit derived by Defendants rightfully belongs to the State, as the State incurred the costs of the grossly inflated prices paid for diabetes products,” the complaint stated. “It would be inequitable for Defendants to be permitted to retain any of the profits derived from their unfair and unconscionable methods, acts and practices described herein.”
The state is demanding a jury trial.
During the press conference, Rokita said he suspected the companies will attempt to move jurisdiction to the federal courts, but that the state will try to fight against that.
“This is not something our office takes lightly. Time and time again. We have seen Big Pharma, capital B capital P going after the little guy and crippling them financially. They know insulin is necessary to keep these patients alive, but they still insist on jacking up the prices to the point where people simply cannot afford them by using the complicated drug distribution scheme, relying upon relied upon by pharmacy benefit managers to facilitate and hide their scheme. These drug companies have conspired to raise prices on insulin medications more than 1,000% in the last decade alone,” Rokita said.
Benjamin Widlanski, a partner at Kozyak Tropin & Throckmorton, said the lawsuit creates substantial implications.
“The first implication is just that if these cases are successful, cost of insulin will come dramatically down that obviously will accrue to the benefit of diabetics, insurance companies. self funded plans, and I think the healthcare system as a whole,” Widlanski said.
Widlanski, a co-lead attorney for the self-funded payer track in the Insulin Pricing Multi-District Litigation, said the second implication sheds a light on the PBM model.
“PBMs serve only to act as a middleman in creating formularies and in that role, they have been extraordinarily profitable to the detriment of the American healthcare system,” Widlanski said.
He added that he hopes more states and others bring lawsuits and try to get their money back.
Please enable JavaScript to view this content.