US States, Cities Sue Insulin Makers Over Shortages, High Prices

November 28, 2023 - In recent weeks, a wave of lawsuits has emerged as more states and cities in the United States take legal action against insulin makers and pharmacy benefit managers (PBMs). These lawsuits allege that Eli Lilly, CVS Pharmacy, Novo Nordisk, and several other companies engaged in illegal practices to artificially drive up the prices of insulin, making it unaffordable for many individuals with diabetes.  

"Today, insulin has become the poster child for skyrocketing and inflated drug prices," an Illinois fraud lawsuit states. 

As a result, state and local governments claim to have overpaid for this life-saving medication. The lawsuits come at a time when insulin shortages and escalating prices have become pressing issues, prompting authorities to seek accountability and equitable access to affordable insulin. 

Several states and cities have taken legal action to address the insulin affordability crisis. State officials in Utah and Arizona, and municipalities in New York, Virginia, Maryland, Illinois, and Ohio have filed lawsuits against insulin manufacturers and PBMs. These legal actions seek to hold the companies accountable for their alleged role in driving up insulin prices. More state and local governments are expected to follow suit in the coming months. 

“For the past 20 years, the price of insulin increased many times faster than prices for consumer goods and services,” said Attorney General of Arizona Kris Mayes, in a press release. “We now know that while thousands of Arizonans struggled to pay for this life-saving drug, pharmaceutical companies and middlemen were scheming to inflate prices and skim extra profits off the top to enrich themselves.”

The cost of insulin has been a longstanding concern, with many individuals struggling to afford this essential medication. The recent lawsuits highlight the growing frustration among state and local governments over the escalating prices, which have placed an undue burden on individuals with diabetes.  

“Little about these medications has changed over the past 100 years; today’s $350 insulin is essentially the same product the manufacturers sold for $20 in the 1990s,” lawyer William E. Spivey said in the lawsuits filed in US District Court in Alexandria and Richmond, Virginia. 

The plaintiffs argue that insulin makers and PBMs conspired to manipulate prices, hindering access to affordable insulin and exacerbating the financial strain on patients and healthcare systems.

Recognizing the urgency of the insulin affordability issue, President Biden has invoked the Cold War-era Defense Production Act to boost investment in US manufacturing of medicines and medical supplies. Under this authority, the US Department of Health and Human Services will facilitate investments in essential medicines, including insulin. The administration aims to strengthen domestic production capabilities to ensure a stable supply of affordable insulin and other critical medications.

In addition to invoking the Defense Production Act, the Biden administration plans to improve supply chain monitoring by enhancing data sharing among relevant agencies. This initiative aims to enhance transparency and identify potential bottlenecks or vulnerabilities in the insulin supply chain. By closely monitoring insulin production, distribution, and pricing, the government seeks to prevent future shortages and address pricing discrepancies.

The lawsuits and the Biden administration's response significantly affect the healthcare technology sector. Innovations in healthcare technology, such as improved insulin delivery systems and digital health solutions for diabetes management, are crucial in enhancing patient outcomes and reducing healthcare costs. However, the insulin affordability crisis highlights the need for broader systemic changes to ensure equitable access to these technologies.

Addressing the insulin affordability crisis requires collaboration among various stakeholders, including insulin manufacturers, PBMs, healthcare providers, payers, and policymakers. By working together, these stakeholders can explore innovative pricing models, increase transparency, and develop strategies to lower the cost of insulin while maintaining sustainable business practices. Healthcare technology companies can contribute by creating innovative solutions that improve insulin delivery, enhance diabetes management, and promote value-based care.

The surge in lawsuits against insulin makers and PBMs reflects the growing frustration over this vital medication's escalating prices and shortages. State and local governments are taking legal action to seek accountability and affordable access to insulin for their constituents. The Biden administration's invocation of the Defense Production Act demonstrates a commitment to addressing the insulin affordability crisis and improving the stability of the insulin supply chain.  

As the healthcare technology sector continues to innovate, collaboration among stakeholders is crucial to drive meaningful change and ensure affordable access to life-saving medications like insulin.