Texas Attorney General Sues Insulin Manufacturers and PBMs

(Reuters) – The Texas attorney general has sued leading insulin manufacturers and pharmacy benefit managers (PBMs), accusing them of collaborating to inflate the cost of insulin.

Texas Attorney General Ken Paxton’s office announced on Thursday it had sued insulin makers Eli Lilly, Novo Nordisk, and Sanofi. The office also targeted PBMs, including CVS’ Caremark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx, who act as intermediaries in negotiating drug prices and coverage.

Why It’s Important

The lawsuit aims at both insulin manufacturers and PBMs, unlike previous actions by U.S. antitrust regulators that focused only on PBMs. In September, the U.S. Federal Trade Commission (FTC) sued the same PBMs for allegedly steering diabetes patients towards higher-priced insulin for larger rebates from pharmaceutical companies, without initiating action against insulin manufacturers.

Context

In the Texas lawsuit, Paxton accused manufacturers of artificially inflating insulin prices and paying a significant, undisclosed portion back to the PBMs for preferential treatment. The PBMs then reportedly favored the manufacturer with the highest list prices while excluding lower-priced alternatives, according to a press release from the attorney general’s office.

Key Quote

“Big Pharma insulin manufacturers and PBMs worked together to take advantage of diabetes patients and drive prices as high as they could,” stated Paxton.

Responses from the defendants include:
– CVS claims the allegations are false, intending to vigorously defend against the suit.
– UnitedHealth’s OptumRx labels the lawsuit without merit.
– Cigna did not provide direct comments but referred to its earlier statement calling the FTC’s allegations baseless.
– Novo Nordisk called the claims meritless and intends to defend against them.
– Sanofi stated its pricing practices have always complied with the law.
– Lilly did not immediately respond to requests for comments.