AG files suit against insulin manufacturers and PMBs

Published 10:39 am Friday, August 4, 2023

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Attorney General Daniel Cameron announced Wednesday he has filed a lawsuit against three pharmacy benefit managers (PBMs)—CVS Caremark, Optum Rx, and Express Scripts—for their role in an insulin pricing scheme.

The lawsuit alleges insulin manufacturers and PBMs worked in tandem to manipulate and increase insulin prices.  The new suit naming PBMs was filed in a prior action that is currently pending in the Franklin Circuit Court against insulin manufacturers.

Nearly 450,000 Kentuckians live with diabetes, and an additional 1.1 million Kentuckians are prediabetic, according to Cameron’s office. Without life-saving insulin, these Kentuckians would be in grave danger.

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Given the PBMs’ market power, and the crucial role their standard formularies play in the pharmaceutical pricing chain, PBMs have significant leverage against insulin manufacturers.

The lawsuit alleges that instead of using such leverage to negotiate lower prices for their customers, PBMs have sought to increase their own profits by raising insulin prices.  In that scheme, the insulin manufacturers artificially and willingly raised their reported prices and then deceptively refunded a significant portion of that price to PBMs through rebates, discounts, credits, and administration fees.

This occurred year after year, leaving many diabetic Kentuckians unable to afford insulin.  Executives for PBMs recently testified that between 75 and 84 cents of every dollar spent on insulin goes directly to affiliates of PBMs, Cameron’s office says.

“I understand the pain inflicted on Kentucky families by unfair and inflated insulin prices,” Cameron said.  “The unlawful business practices that drove these increases have to end, and normal market forces must be allowed to lower the cost of insulin for all Kentuckians.”

He adds, the attorneys general from Arkansas, California, Illinois, Kansas, Louisiana, Mississippi, Montana, and Ohio have filed similar lawsuits in their respective states.

The suit seeks civil penalties of $2,000 for each willful violation of the Kentucky Consumer Protection Act, as well as the awarding civil penalties of $10,000 for each violation of the Kentucky Consumer Protection Act, where Defendants’ conduct was directed at a person aged sixty years of age or older.  It also requests a jury trial.

To read a copy of the lawsuit, click here.