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The leading U.S. drugmakers and pharmacy benefit managers colluded to fix prices for insulin, leading to skyrocketing costs and windfall profits for the companies, a new lawsuit alleges ( Boss v. CVS Health Corp. , D.N.J., No. 2:17-cv-01823, complaint filed 3/17/17 ).
Some of the biggest players in the American health-care industry are targeted in the 69-count class action complaint, filed March 17 in a federal court in New Jersey. Drug manufacturers Sanofi-Aventis, Novo Nordisk and Eli Lilly are included. Also named are the country’s three largest pharmacy benefit managers—CVS Health, Express Scripts and OptumRx—which together control 80 percent of the PBM industry and manage benefits for 180 million people.
The PBMs used their role as gatekeepers between health plans and drug companies to steer plans toward certain drugs, such as the insulin treatments used by individuals with diabetes, the lawsuit alleges. The drug companies then ratchet up the retail prices on those drugs and share the excess profits with PBMs through a rebate system the lawsuit describes as a “massive slush fund.” The scheme caused rapid and lockstep price increases of more than 150 percent in the insulin treatments sold by Sanofi, Novo Nordisk and Eli Lilly, according to the lawsuit.
The defendants are accused of violating the Employee Retirement Income Security Act, federal antitrust and racketeering statutes, and the laws of all 50 states and the District of Columbia.
The lawsuit was filed by four individuals who receive health insurance through a variety of sources: employer-sponsored health plans governed by ERISA, insurance plans purchased through the Affordable Care Act marketplaces and Medicare Part D prescription drug plans. The Type 1 Diabetes Defense Foundation, a nonprofit supporting individuals living with type 1 diabetes, is another plaintiff in the lawsuit.
Critchley Kinum & Denoia LLC and Keller Rohrback LLP represent the plaintiffs.
A spokesman for CVS said the allegations were “built on a false premise” and “completely without merit.” PBMs such as CVS play no role in determining drug prices, the spokesman told Bloomberg BNA. He added that the lawsuit “grossly mischaracterizes” how prescription drug pricing works and emphasized that CVS passes along “more than 90%" of the price discounts
Novo Nordisk said it was aware of the complaint and its “characterization of the pharmaceutical supply chain.” The company disagrees with the allegations and has a “longstanding commitment to supporting patients’ access to our medicines,” a spokesman told Bloomberg BNA.
Spokesmen for Express Scripts and Sanofi denied the allegations and said the companies would defend themselves vigorously.
OptumRx and Eli Lilly didn’t immediately respond to Bloomberg BNA’s requests for comment.
To contact the reporter on this story: Jacklyn Wille in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
Text of the complaint is at http://www.bloomberglaw.com/public/document/BOSS_et_al_v_CVS_Health_Corporation_et_al_Docket_No_217cv01823_DN.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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