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Arizona AG Kris Mayes sues manufacturers over 'exorbitant' prices being charged for insulin for diabetes patients

Kris Mayes highlighted the substantial surge in insulin costs, far exceeding other consumer goods over two decades
PUBLISHED NOV 28, 2023
Arizona's Attorney General Kris Mayes has initiated legal action, suing pharmacy benefit managers (PBMs) and pharmaceutical manufacturers for manipulating insulin prices (Wikipedia)
Arizona's Attorney General Kris Mayes has initiated legal action, suing pharmacy benefit managers (PBMs) and pharmaceutical manufacturers for manipulating insulin prices (Wikipedia)

PHOENIX, ARIZONA: Arizona's Attorney General, Kris Mayes, has taken legal action by filing a lawsuit against pharmacy benefit managers (PBMs) and pharmaceutical manufacturers, accusing them of artificially inflating insulin prices and violating the Arizona Consumer Fraud Act.

According to Arizona Attorney press release, Mayes highlighted the alarming increase in insulin prices, which has far outpaced the rise in prices for other consumer goods and services over the last two decades.

“For the past 20 years the price of insulin increased many times faster than prices for consumer goods and services,” said Attorney General Mayes.

“We now know that while thousands of Arizonans struggled to pay for this life-saving drug, pharmaceutical companies and middlemen were scheming to inflate prices and skim extra profits off the top to enrich themselves.” 

The lawsuit details alleged PBM 'strategies' to line their pockets

The lawsuit revolves around the strategies employed by PBMs in managing formularies, which determine the drugs accessible to patients under health insurance plans.

By excluding specific insulin brands from these formularies, PBMs allegedly prevented manufacturers from selling these insulins to patients covered by these plans.

PBMs reportedly coerced manufacturers into providing 'rebates' to avoid exclusion from formularies.

However, instead of reducing prescription drug costs, manufacturers responded by raising insulin prices overall to cover the increased rebates paid to PBMs.

While assurances were made to pass these increased rebates to health insurers and patients, the lawsuit alleges that PBMs used complex financial structures to retain a substantial portion of these inflated profits for themselves.

Mayes highlights Arizona diabetic patients' struggle

Mayes underscored the struggle faced by diabetes patients in Arizona, emphasizing that the lawsuit aims to not only compel companies to return unfair profits to consumers but also to ensure transparent operations, allowing patients to comprehend the actual cost of their prescription drugs.

“While the drug companies and PBMs were engaged in a secretive system of baseless price increases and kickbacks, Arizona diabetes patients were facing life-or-death struggles to pay for their medication,” continued Mayes.

“This lawsuit will not only force these companies to return their unfair profits to Arizona consumers but will also force the companies to operate transparently so patients can understand the true cost of their prescription drugs.” 

The lawsuit targets major PBMs such as CVS Caremark, Express Scripts, and OptumRx, along with insulin manufacturers Novo Nordisk Inc., Sanofi-Aventis U.S. LLC, and Eli Lilly and Company.

Seeking restitution for insulin overpayments, disgorgement of excessive profits, and civil penalties for unfair trade practices, the lawsuit also seeks a court order to permanently prevent defendants from engaging in similar pricing schemes.

Mayes emphasized that the lawsuit goes beyond insulin prices, aiming to uncover and halt alleged deceptive rebate schemes that contribute to soaring medication costs for patients.

Leading the legal proceedings are Leslie Kyman Cooper, Vince Rabago, and Shane Ham from the Office of the Attorney General, supported by several outside law firms assisting Arizona in this legal battle.

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