Over the last five years the three biggest insulin manufacturers have raised their benchmark prices by about 150 percent. What used to cost $25 dollars a vial has now skyrocketed to $300 or $450 a vial creating an affordability crisis for millions of diabetics who depend on regular insulin injections to stay alive and healthy.
A national class action suit filed at United States District Court of New Jersey (Case 3:17-cv-00699-BRM-LHG) has been launched against three drug manufacturers, Sanofi, Novo Nordisk and Eli Lilly alleging that they are “committing fraud and illegally raising the price of insulin” for people living with diabetes.
“Our lawsuit seeks to break up the insulin racket,” says attorney Steve Berman from Hagens, Berman, Sobol and Shapiro in a public statement. “We are seeking to stop these incredible price increases and we’re going to seek to put money back in to the pockets of those who cannot afford to pay for those price increases.”
The suit maintains the increasing cost of insulin is unrelated to costs of research and development. Instead, the suit alleges, consumers are being overcharged through a drug pricing “scheme” that constitutes fraud because it offers a “sticker price” or “list price” to consumers that is substantially more than the price drug companies charge bulk distributors.
“Drug companies are increasing what is called the list price,” explains Berman. “The only people in America that pay the list price are the people who don’t have adequate insurance. There is a secret price that the drug companies charge the middle men. And the difference between the secret price -- that gets split up between the PBMs (bulk distributers) and the insurance companies.”
The result is that uninsured individuals or individuals with high-deductible insurance plans are paying extraordinary high prices for some types of insulin. Analogue insulin is similar to human insulin but it is manufactured in a laboratory. It is then further processed using a recombinant DNA technology. The result is insulin that is used more rapidly and more uniformly than regular human insulin injections.
Diabetics typically use more than one vial of insulin a month. In some cases, American diabetics are facing costs of up to $900 a month to obtain the drug they need to survive.
Many patients report spending 50 percent of their monthly income on insulin medication, others have taken out loans, stayed in bad jobs just to keep their health insurance, kept the heat down and the lights off to save money, moved back in with parents – one man joined the Navy to get health insurance to pay for his wife’s insulin.
The court documents state the pressure from the rising prices is having a devastating mental and physical toll on the diabetics. Many of those people will resort to injecting insulin, or reducing the amount they use, or starving themselves to control blood sugar levels.
“This has severe consequences for many diabetic persons who simply cannot afford to pay for the drug they need for their survival,” says Berman. “They under dose themselves contrary to doctors’ orders. They willfully slip into diabetic or ketoacidosis so they have to go to the hospital and get free insulin in the emergency room.”
Under dosing can lead to “serious complications such as kidney failure, heart disease, blindness, infection and amputations”.
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The suit charges that the drug companies are violating anti-racketeering RICO laws as well as state consumer protection laws and state deceptive trade practice laws. The class action is demanding compensation to individuals who were uninsured or paying out-of-pocket in a high deductible plan or high coinsurance rates and were prescribed Lantus, Levemir, Novolog or Humalog types of insulin and overpaid for their insulin prescriptions.
In addition, eligible plaintiffs may include people who need but did not purchase those types of insulin because they could not afford to.