The Kentucky attorney general’s office has filed a lawsuit against three pharmacy benefit managers (PBMs) for their roles in an alleged insulin pricing scheme.
The lawsuit, filed against CVS Caremark, Optum Rx and Express Scripts, alleges that insulin manufacturers and PBMs worked in tandem to manipulate and increase insulin prices.
Nearly 450,000 Kentuckians live with diabetes, and an additional 1.1 million Kentuckians are pre-diabetic, the attorney general’s office said. Without life-saving insulin, these Kentuckians would be in grave danger.
“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 attorney general’s office stated. “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 the scheme, the attorney general’s office claims 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, the attorney general’s office said, leaving many diabetic Kentuckians unable to afford insulin.
Pharmacy executives recently testified that between 75 and 84 cents of every dollar spent on insulin goes directly to affiliates of PBMs.
“I understand the pain inflicted on Kentucky families by unfair and inflated insulin prices,” Attorney General Daniel 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.”
Attorneys general from Arkansas, California, Illinois, Kansas, Louisiana, Mississippi, Montana, and Ohio have filed similar lawsuits in their respective states. To read a copy of Cameron’s suit, click here.
By Ken Howlett, News Director
Contact Ken at ken@k105.com
