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(Reuters) -California is suing the United States’ leading insulin makers and pharmacy benefit managers, accusing them of using their market power to overcharge patients for the life-saving drug, the state’s attorney general announced on Thursday.
The lawsuit, filed in California Superior Court in Los Angeles, targets Eli Lilly (NYSE:LLY) and Co, Novo Nordisk (NYSE:NVO) A/S and Sanofi (NASDAQ:SNY) SA, which together make more than 90% of the insulin drugs sold globally.
It also names the three largest pharmacy benefit managers (PBMs) – UnitedHealth Group Inc (NYSE:UNH)’s Optum unit, CVS Health Corp (NYSE:CVS)’s CVS Caremark and Cigna Corp (NYSE:CI)’s Express Scripts (NASDAQ:ESRX). PBMs maintain the lists of drugs covered by health insurance plans and negotiate prices with manufacturers, and the top three account for about 80% of the market.
Insulin drugs are used to control blood sugar in patients with diabetes. About 8.4 million Americans depend on insulin, according to the American Diabetes Association.
The defendants did not immediately respond to requests for comment.
Eli Lilly and Sanofi both previously announced that they would cap the cost of a 30-day supply of insulin at $35 for uninsured patients. Eli Lilly’s cap also applies to out-of-pocket cost for insured patients.
California said that the companies’ dominance in the market has allowed them to hike insulin prices at patients’ expense, violating the state’s Unfair Competition Law. The state is seeking unspecified money damages.
Prices of top-selling insulin drugs have soared in recent years. According to a 2021 Congressional report, Eli Lilly had raised the price of its Humalog 1,219% per vial since it launched, Novo Nordisk raised the price of NovoLog 627% since its introduction and Sanofi has raised the price of Lantus 715%
Minnesota, Mississippi, Arkansas and Kansas, as well as groups of drug purchasers, have previously brought similar lawsuits.
