PA sues pharma firms for alleged insulin price manipulation
TL/DR –
Pennsylvania’s Attorney General Dave Sunday has accused several pharmaceutical companies and pharmacy benefit managers of artificially inflating insulin prices by over 1,000%, affecting around 1.3 million diabetic residents and 3.5 million with prediabetes. The lawsuit names Eli Lilly, Sanofi, Novo Nordisk, CVS Caremark, OptumRx among others, alleging that they raised prices of insulin from $20 to $300-$700, despite the drug costing less than $2 to produce. The lawsuit also alleges that these companies paid part of their profits to pharmacy benefit managers for inclusion in their plans, and seeks restitution for affected patients and injunctive relief under the state’s consumer protection law.
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Pennsylvania Officials Allege Price Manipulation in Insulin Market
State officials in Pennsylvania have accused over a dozen pharmaceutical companies and pharmacy benefit managers (PBMs) of using deceptive practices to inflate insulin prices by more than 1000%. These artificially high prices, they claim, imposed severe financial strain on the state’s diabetic population.
The lawsuit, filed by Attorney General Dave Sunday, alleges that this price-gouging scheme affected approximately 1.3 million Pennsylvanians with diabetes and an additional 3.5 million with prediabetes. It further states that the excessive costs of insulin forced many sufferers to resort to desperate measures such as rationing their insulin or starving themselves to maintain control over their blood sugar levels.
Companies in the Spotlight
The defendants named in the lawsuit include notable entities such as Eli Lilly, Sanofi, Novo Nordisk, CVS Caremark, OptumRx, along with 14 other companies. As outlined in the lawsuit, these companies allegedly instigated a steep surge in the price of their insulin products in the mid-2000s, despite the manufacturing costs being under $2.
The lawsuit contends that the companies manipulated prices to charge consumers anywhere from $300 to $700 for insulin products that previously cost around $20. These companies allegedly shared a portion of their profits with PBMs to ensure their products were included in their plans.
According to the lawsuit, the PBMs began to exclude certain drugs from their plans around 2012 to increase their profit shares. The court documents state, “Because the PBM Defendants control which drugs are available for the vast majority of Pennsylvania diabetics and because the price paid by nearly every diabetic and payor is based on the artificially inflated list prices generated by Defendants’ scheme, the Insulin Pricing Scheme directly harms every diabetic and payor in Pennsylvania who purchases these life-sustaining drugs.”
Seeking Justice
In response to these allegations, Attorney General Sunday is seeking restitution for the affected patients and injunctive relief under Pennsylvania’s consumer protection law on the grounds of deceptive business practices. If the court rules in favor of his claims, the defendants could face a penalty of $1,000 for each violation of the Unfair Trade Practices and Consumer Protection Law, with this amount increasing to $3,000 for violations involving victims aged 60 or older.
It’s worth noting that Philadelphia District Attorney Larry Krasner filed a similar lawsuit in 2024, targeting a nearly identical group of pharmaceutical companies and PBMs. That same year, companies like Eli Lilly and Novodisk started cutting their insulin prices following significant backlash and increased federal pressure. The Inflation Reduction Act had previously capped insulin costs at $35 per month for Medicare seniors, beginning in 2023.
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