MN Attorney General Lori Swanson sues drug makers over insulin prices

Minnesota Attorney General Lori Swanson filed a lawsuit in federal court Tuesday against three manufacturers of synthetic insulin alleging they defrauded consumers by artificially inflating prices for a drug many need to live.

Swanson claims Sanofi, Novo Nordisk and Eli Lilly increased the list prices of several different types of insulin so they could offer larger and larger rebates to pharmacy benefit managers, or PBMs, which negotiate the cost of drugs for insurers and play a role in deciding what brands are available under insurance plans.

The alleged “scheme,” as Swanson described it Tuesday, was designed for pharmaceutical companies to win favor with PBMs and be on the list of “formulary” drugs preferred by insurers.

“The result is the public doesn’t know the true cost of insulin, they just see what they are paying,” Swanson said.

All three companies named in the lawsuit denied the claims.

The price of insulin has skyrocketed in recent years. The cost of some types have jumped more than seven fold, while others have increased two or three times.

Dr. Victor Montori, a diabetes specialist at the Mayo Clinic in Rochester, Minn., says the exponential increases in insulin prices have led to a quarter of diabetes patients who require it to ration their medicines.

“This rationing has led to otherwise avoidable emergencies,” Montori said. “Lives have been made miserable and some have been cut short by the decision to price insulin outside their reach. This cruelty must stop.”

Montori noted the case of Alec Smith, a 27-year-old restaurant manager who died this summer because he couldn’t afford his medications.

Amanda Swanson knows those sacrifices first hand. The mother and Type I diabetic said during Tuesday’s news conference about the lawsuit that she’s had to choose between insulin and feeding her family.

“Where do you draw the line?” she asked. “I have kids that have to eat. I have to live.”

Roughly 450,000 Minnesotans have diabetes, said Dr. Lisa Fish, division director of Endocrinology and Diabetes Care at Hennepin County Medical Center in Minneapolis. Of those patients, about 10 percent have Type I diabetes, which requires routine insulin injections.

The remaining patients with Type II diabetes can also rely on insulin to survive. It costs about $13,000 a year to treat a patient with diabetes, Fish said.

But it costs a lot more to treat someone who is hospitalized because they couldn’t afford their medications, she said.

“Withholding insulin from people who need it to survive is also foolish as far as cost in addition to the terrible damage it does to people’s lives,” Fish said.

Swanson’s lawsuit was filed in federal court in New Jersey because the case includes a racketeering allegation that the drug companies committed mail and wire fraud when they distributed inflated prices. No pharmacy benefit managers are named in the lawsuit to limit the scope of the case.

“Ultimately, it is the drug companies that are putting the prices into place,” Swanson said. “We decided to go right to the top.”

Sales of the five most common insulin products named in the lawsuit topped more than $14 billion in 2016, according to Swanson’s office.