A class-action lawsuit filed in the U.S. District Court of Massachusetts alleges that insulin makers Sanofi (NYSE:SNY), Novo Nordisk (NYSE:NVO) and Eli Lilly (NYSE:LLY) conspired to raise their list prices to get access to pharmacy benefit managers’ preferred lists, instead of competing with each other based on real market prices.
In the last 5 years, the 3 companies have raised the sticker prices on their drugs by more than 150%, according to the lawsuit. A recent study by the American Medical Association demonstrated that the price of insulin nearly tripled between 2002 and 2013.
Some of the lawsuits’ plaintiffs pay almost $900 each month for their diabetes medications, according to the firm representing the patients, Hagens Berman.
“People living with diabetes are practically imprisoned under the price hikes and sadly are resorting to extreme measures to afford the medication they need to live,” Steve Berman, managing partner of Hagens Berman, said in prepared remarks.
The lawsuit claims that some patients have resorted to intentionally starving themselves to control their blood sugar. Other members of the class-action lawsuit said they have allowed themselves to fall into diabetic ketoacidosis in an attempt to get insulin samples from hospital emergency rooms.
The suit alleges that the 3 companies have exploited the drug-pricing system, ensuring higher profits for manufacturers and other players such as pharmacy benefit managers.
The suit comes as many companies are trying to escape widespread criticism regarding the industry’s price increases. Last week, Merck released figures about its U.S. pricing practices, joining Johnson & Johnson (NYSE:JNJ), which said earlier this month that it expects to issue a report detailing how much it has raised the list prices for its prescription drugs.
Allergan (NYSE:AGN) and Nordisk have pledged to keep their annual price increases to single-digit percentages. When Allergan published its “social contract” in September, CEO Brent Saunders challenged other companies to limit price increases “before we all face the impact of government regulation that stifles innovation and patient care.”
Drug pricing has been at the forefront of public discussion regarding healthcare. The industry’s pricing problems were highlighted in 2015 when Turing Pharmaceuticals raised the price of its malaria drug Daraprim from $13.50 to $750 a pill. This year, Mylan (NSDQ:MYL) has been the poster-child for industry greed for many politicians, after reports showed that the company raised the price of its EpiPen device 500% since it acquired the product in 2007.