Summary:
The Type 1 Diabetes Defense Foundation has filed alawsuit in federal court seeking disclosure of manufacturers’ netrealized prices on insulin and now calls for support to expand itscampaign to make insulin affordable again. The lawsuit alleges thatfor years insulin manufacturers and PBMs have conspired to hide theactual U.S. price of insulin—the heavily rebated prices that PBMs andinsurers actually pay, instead of the artificially inflated list prices usedby PBMs to calculate consumer pre-deductible and coinsurancepayments. T1DF separately observes that the American DiabetesAssociation has continued to fundraise off the “staggering cost ofdiabetes” and engaged in behind-the-scenes meetings with insulinmanufacturers, but has failed to take direct action to expose theexploitative dual-pricing scheme and protect people with diabetesfrom artificially high insulin prices and cost-related stigma. T1DF nowseeks to fill the crucial role of U.S. diabetes watchdog that the ADAhas thus surrendered.
March 30, 2017 - Eugene, OR.
The Type 1 Diabetes Defense Foundation has retainedclass-action law firm Keller Rohrback and on March 17, 2017, filed a lawsuit against thenation’s three largest pharmacy benefit managers, Express Scripts, OptumRx, and CVSCaremark, and the three major insulin manufacturers, Sanofi-Aventis, Novo Nordisk, andEli Lilly (Boss v. CVS Health Corp, 3:17-cv-01823). Learn more about Keller Rohrback'sinsulin overpricing case.
The lawsuit alleges that PBMs, insurers and insulin manufacturers have conspired to hidefrom consumers their dual pricing scheme and to mislead consumers to believe thatunrebated list prices—assessed at the pharmacy point of sale and used by PBMs tocalculate pre-deductible or coinsurance payments—represented the actual costs PBMsand insurers paid for insulin, while hiding the increasingly large kickbacks received frommanufacturers (kept by PBMs and insurers), and thus the much lower effective net pricesrealized by manufacturers on analog insulins.
The following is a statement from the Type 1 Diabetes Defense Foundation:
Contrary to statements by the American Diabetes Association, the insulin pricing processis not mysterious: as PBMs have demanded ever larger rebates, manufacturers haveexponentially increased analog insulin list prices to preserve their profit margins. Nor isprice inflation new: Truven Health Analytics data reported last September by
BusinessInsider
shows list prices for Novolog and Humalog had already increased by 150%between 2000 and 2010, in the run-up to overall price increases of over 300%. By early2016, the out-of-control "gross-to-net" pricing bubble, warped rebate-driven channelincentives and related wasteful costs had been thoroughly documented. Restrictiveformulary manipulations—critical for extracting rebates from manufacturers—had becomeso prevalent that Express Scripts described these in their April 2016 answer to an Anthemlawsuit (Anthem, Inc. v. Express Scripts, Inc. (16 Civ. 2048)) as “standard industry practice”consistent with “modern benefit designs.” By the close of 2016, just one crucial missingpiece remained to be exposed: the actual net prices realized by manufacturers, afterdelivering rebates on analog insulins potentially as high as 75% off public list prices.Journalist David Lazarus wrote on insulin pricing late in 2016, “Drug companies respondonly to the public embarrassment of being caught exploiting the misfortunes of the sick.”Charles Fournier, T1DF’s Director of Legal Advocacy, notes that drug companies alsorespond to lawsuits. But nearly a year after Yale endocrinologist Kasia Lipska’s “Break Upthe Insulin Racket” was published in The New York Times, first bringing PBM rebating on
insulin to public attention, PBMs, manufacturers and insurers had neither beenembarrassed into ending PBM-controlleddual pricing for insulin nor sued to disclosemanufacturers’ effective net prices.Throughout 2016, despite increasing socialmedia pressure from activists inside andoutside the U.S. (including T1International’s#Insulin4All campaign) and attention frominvestigative journalists, industry-financedpatient advocacy organizations—including the ADA and JDRF—the Endocrine Society, andsponsored diabetes news outlets instead engaged in evasive action. They called forconciliatory “continued dialogue across the diabetes marketplace,” endorsedmanufacturer Patient Assistance Programs that charge patients almost twicemanufacturers’ apparent net realized prices, and misleadingly blamed insulin priceincreases on unspecified “government-protected monopolies.” The ADA and theEndocrine Society even suggested walking back the analog standard of care. Following aNovember 2016 meeting with insulin manufacturers, the ADA claimed only aCongressional investigation could reveal why analog insulin prices had skyrocketed, andthen launched a public petition campaign and “online hub for insulin affordabilityadvocates” that made no mention of pricing mechanisms, thus effectively leaving Pharmalobbyists in control of proposing “solutions” to Congress.“For years, the ADA and JDRF have contributed to stigma against people with diabetesby fundraising for research off ‘the staggering cost of diabetes in America,’ indirectlyblaming people with diabetes for costing U.S. taxpayers in excess of $200 billion annuallyin Medicare dollars alone,” says Fournier. “Yet as the exploitative nature of the dualpricing scheme has become increasingly clear, these diabetes PAOs have taken noconcrete action to bring down that artificially inflated ‘staggering cost.’ When people aredying because they can’t afford insulin, it is no longer time for petitioning and behind-the-scenes.
It is time to publicly embarrass PBMs, manufacturers, and insurersfor exploiting people with diabetes, time to embrace price transparency lawsuits, tocampaign for the end of rebate-driven dual pricing, and to demand immediate fulldisclosure of the effective net price for analog insulins actually realized bymanufacturers.”For the pharmaceutical industry, the stakes are high. The stakes are even higher forpatients. With the 2016 issuing of the CMS Final Rule on Medicaid pricing—and its “bestprice available” mandate—the industry’s current challenge is to anchor all prices,including Medicaid reimbursement prices, at the highest possible point. T1DF retainedKeller Rohrback and filed
Boss v. CVS Health
in pursuit of the opposite goal: to makeinsulin affordable again. Net price transparency and cost-based pricing will also benefitpeople with other “costly” chronic conditions including HIV/AIDS and hemophilia. We arenow asking individuals and philanthropic organizations who care about U.S. drugaffordability to lend their vocal support and to fund T1DF’s fight for pricing transparency.
About T1DF.
The Type 1 Diabetes Defense Foundation is an Oregon-based nonprofit501(c)(3) dedicated to advancing equal rights and opportunities for people who needinsulin to live. T1DF accepts no industry funding
