County Will Sue Insulin Companies for Price-Fixing

Milwaukee County Courthouse. Photo by Graham Kilmer.

Milwaukee County’s attorneys plan to sue insulin production and distribution companies over an alleged nationwide price-fixing scheme.

The central contention of the lawsuit is that private companies have “artificially inflated the prices of insulin and insulin analog diabetes medications beyond their reasonable market value,” according to a report from the county’s Office of Corporation Counsel (OCC).

The OCC wants the county to join a multi-district lawsuit involving cases against manufacturers Eli Lilly, Novo Nordisk, and Sanofi-Aventis; and pharmacy benefit managers (PBMs) CVS Caremark, Express Scripts, and Optum.

“These lawsuits further allege that price increases were not the product of a competitive market and did not result from expensive research and development aimed at improving the drugs,” the report states. “Instead, the prices for these medications increased up to ten times their original value because the Manufacturers and the PBMs colluded to set false prices and profit at the expense of payors around the country.”

Multi-district litigation requires the approval of a federal judge, and is used when multiple plaintiffs in different jurisdictions are filing essentially the same claims. The same strategy was used by the county to successfully sue opioid producers and distributors. That suit ended with the county receiving the largest settlement for a local government in state history.

The county’s attorneys will go before the Milwaukee County Board of Supervisors in March seeking authority to contract with outside counsel to begin the litigation. The cases will be tried in a New Jersey federal court.

“We’re gonna go after the pharmaceutical industry again,” Milwaukee County Corporation Counsel Margaret Daun told Urban Milwaukee.

After the county’s experience with the opioid litigation, Daun said she began paying special attention to the pharmaceutical industry. “We’ve seen so much extraordinary pricing for necessary drugs that it seemed to me we needed to pay closer attention.”

What her office found is that the profits for both the manufacturers and the PBMs, which act as an intermediary, have been exploding over the past decade and she believes there is no reasonable business rationale for it.

Insulin is a lifesaving medicine for people living with diabetes or kidney disease, and, “despite the prominence of the disease and its long-understood and necessary treatment with insulin, the costs associated with diabetes insulin treatment in the United States have skyrocketed in the last 20 years, and, since 2003, the list price of certain insulins has increased more than 1,000%,” the OCC wrote in a resolution headed to the board.

For an employer like Milwaukee County, which provides health benefits to thousands of current and former employees, the rising prices have cost taxpayers millions, Daun said.

“This isn’t a problem that’s unique or isolated to Milwaukee County,” Daun said. “But I’ll be damned if we’re not going to do something about it.”

The office also points to a report published by the U.S. Senate Finance Committee after a two-year investigation that found manufacturers “aggressively raising” the prices of their drugs without much improvement shown in their effectiveness.

Despite this Senate report, Congress has not enacted legislation aimed at addressing the problem. And the web of federal regulatory agencies that potentially have jurisdiction over the issue — theFood and Drug Administration, Federal Trade Commission and Securities and Exchange Commission — have also done nothing, Daun said.

“So where the regulatory structure fails and Congress fails to step in, that’s where plaintiffs lawyers are standing up to defend regular Americans,” Daun said. “It’s only by these painfully expensive lawsuits that, in many ways, plaintiffs lawyers force industry to do the thing that’s best for us all.”

Researchers have found that the rising costs for insulin are forcing many Americans to ration the lifesaving drug. What the OCC suit would allege is that insulin costs are the result of price-fixing and other fraudulent business practices, Daun said, “knowing that as a result people will die.”