Florida Sues Eli Lilly, Novo Nordisk and Pharmacy Benefit Managers Over Insulin Pricing

The lawsuit, filed Tuesday in Miami-Dade County Circuit Court, accuses drug manufacturers and prescription benefit intermediaries of using rebates and preferential drug coverage arrangements to maintain artificially high list prices, according to a report by Bloomberg Law.

Florida Attorney General James Uthmeier announced the legal action at a news conference in Tampa, saying the state’s investigation had identified pricing arrangements that allegedly benefited manufacturers and pharmacy benefit managers at the expense of patients and independent pharmacies.

The defendants include pharmacy benefit managers CVS Caremark, Express Scripts and OptumRx, as well as rebate aggregators Zinc, Ascent and Emisar. UnitedHealth Group is also named in the complaint, Bloomberg Law reported.

At the center of the case is the relationship between pharmaceutical manufacturers and pharmacy benefit managers, which negotiate drug prices and determine which medications receive preferred coverage under health insurance plans.

Florida alleges that manufacturers established high published prices for insulin and certain GLP-1 medications while providing substantial rebates and discounts to pharmacy benefit managers in return for favorable placement on insurance formularies.

According to Bloomberg Law, the state contends that these arrangements discouraged price competition and prevented patients from receiving the full benefit of negotiated discounts.

The complaint identifies a significant concentration of market power among the companies involved. The three manufacturers produce approximately 90% of the world’s insulin, while the three pharmacy benefit managers handle roughly 80% of prescriptions in the United States, according to figures cited by the Florida attorney general.

The state argues that the pricing arrangements can particularly affect patients whose out-of-pocket costs are calculated using a drug’s published price rather than its lower price after rebates.

As an example, Florida alleges that Eli Lilly’s Humalog insulin has a listed price of approximately $280 per vial, with about $210 returned through rebates and discounts associated with pharmacy benefit managers, Bloomberg Law reported.

Related: Pfizer Files Second Lawsuit Over Novo Nordisk’s Bid for Metsera

We’d love to be your preferred source for news.

Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

Add as Preferred Source

Florida Seeks Damages and Changes to Pricing Practices
The lawsuit brings claims under the Florida Antitrust Act and the Florida Deceptive and Unfair Trade Practices Act.

Florida alleges that the defendants’ arrangements restricted competition, disadvantaged lower-cost medications and limited consumers’ access to more affordable treatment options.

The state is seeking a permanent injunction, restitution, damages, civil penalties and the return of profits allegedly obtained through unlawful conduct, according to reporting by Florida’s Voice on the attorney general’s announcement.

Uthmeier emphasized the potential impact on Florida residents with diabetes, saying that approximately one in 10 people in the state have the condition. He said the state expects the lawsuit to produce financial consequences substantial enough to encourage changes in the companies’ conduct.

The attorney general also indicated that Florida could pursue additional litigation involving prescription drug pricing in the coming weeks and months, Florida’s Voice reported.

Drugmakers and Benefit Managers Face Legal Challenge

The case adds to legal scrutiny of the pharmaceutical supply chain, particularly the role of rebates in determining prescription drug prices.

Pharmacy benefit managers negotiate discounts with manufacturers on behalf of health insurers and other prescription drug plans. Florida’s complaint challenges whether the financial incentives created by those negotiations have encouraged higher published prices rather than more affordable medications.

The state’s allegations extend beyond insulin to certain other treatments for diabetes, including GLP-1 medications.

Source: Bloomberg Law