ALEXANDRIA, Va. — The City of Alexandria is suing drug manufacturers and distributors in federal court citing a "deceptive conspiracy" to set drug prices higher and higher to cash in, leaving employers and sick people to foot the bill.
The city is suing pharmaceutical companies Eli Lilly, Sanofi, and Novo Nordisk – and distributors CVS Caremark, Express Scripts and OptumRx. The city cites the "dramatic rise in the prices" of diabetes medications in its complaint.
"Over the past 25 years, the list price of certain insulins has increased in some cases by more than 1000% (10x)," the lawsuit says. "According to the U.S. Bureau of Labor Statistics, $165 worth of consumer goods and services in 1997 dollars would, in 2021, have cost $289 (1.75x)."
The lawsuit cites pricing hikes since the 90s that outpace the value of the dollar:
- Since 1997, Eli Lilly has raised the list price of a vial of Humulin R (500U/mL) from $165 to $1784 in 2021 (10.8x).
- Since 1996, Eli Lilly has raised the price for a package of pens of Humalog from under $100 to $663 (6.6x) and from less than $50 per vial to $342 (6.8x).
- From 2006 to 2020, Novo Nordisk raised the price of Levemir from $162 to $555 (3.4x) for pens and from under $100 to $370 per vial (3.7x).
- From 2002 to 2021, Novo Nordisk raised the list price of Novolog from $108 to $671 (6.2x) for a package of pens and from less than $50 to $347 (6.9x) per vial.
- Sanofi has raised the list prices for Lantus from less than $200 in 2006, to over $500 in 2020 (2.5x) for a package of pens and from less than $50 to $340 per vial (6.8x).
>Read the full lawsuit below:
The city is going after distributors as well.
"CVS Caremark, Express Scripts, and OptumRx ... are pharmacy benefit managers (PBMs) that work in concert with the Manufacturers to dictate the availability and price of the at-issue drugs for most of the U.S. market," the lawsuit says. "These middlemen capture as much as half of the money spent on each insulin prescription (up from 25% in 2014), even though they contribute nothing to the innovation, development, manufacture, or production of the drugs."
The city's lawsuit alleges a conspiracy between pharmaceutical companies and the distributors working toward a common goal of setting higher prices, raking in money while putting the financial burden on the people who desperately need medication.
"The Manufacturers and PBMs understand that the PBMs’ national formularies drive drug utilization. The more accessible a drug is on the PBMs’ national formularies, the more that drug will be purchased throughout the United States. Conversely, the exclusion of a drug from one or more of the PBMs’ formularies can render the drug virtually inaccessible for millions of covered persons," the lawsuit says. "Given the PBMs’ market power and the crucial role their standard formularies play in the pharmaceutical pricing chain, both Defendant groups understand that the PBM Defendants wield enormous influence over drug prices and purchasing behavior. The unfair and deceptive conspiracy at the root of this Complaint—the “Insulin Pricing Scheme”—was borne from this mutual understanding."
Health insurance plans take the hit for higher prices, which are often funded by employers.
A similar lawsuit is being filed in Arlington County.
"The lawsuit seeks to recover damages for the increased costs borne by Arlington County due to the alleged pricing scheme and to prevent these companies from continuing their alleged unlawful, deceptive, and anticompetitive practices," the law firm representing the county says.