Diabetes patients sue insulin makers for ‘pricing fraud’

By Carolyn Y. Johnson

Laura Marston holds up a vial of Humalog, a type of insulin she takes for type 1 diabetes at her home in Washington, D.C. When she was first diagnosed at 14, the list price for the drug was $21 per vial. Now it's list price is more than $250 for a vial. (Jorge Ribas, The Washington Post)

Laura Marston holds up a vial of Humalog, a type of insulin she takes for Type 1 diabetes at her home in Washington, D.C. When she was first diagnosed at 14, the list price for the drug was $21 per vial. Now it’s list price is more than $250 for a vial. (Jorge Ribas/The Washington Post)

A group of diabetes patients filed a lawsuit Monday against three drug companies for systematically increasing the list prices of insulin for years in an alleged fraudulent-pricing scheme that saddled patients with “crushing out-of-pocket expenses,” according to the filing.

The insulin market is dominated by an oligopoly of companies that sell many billions of dollars worth of insulin each year — and have steadily raised the list prices of their drugs. A version of insulin called Humalog launched two decades ago with a sticker price of $21 a vial and has increased to $255 a vial.

Meanwhile, competition has appeared to work in a perverse way, with list prices of competing insulins often rising in concert. Last year, Sen. Bernie Sanders (I-Vt.) and Rep. Elijah E. Cummings (D-Md.) asked for a federal investigation into “possible collusion” on insulin prices.


[Why treating diabetes keeps getting more expensive]

The lawsuit, filed by 11 patients in U.S. District Court in Massachusetts, focuses on a common practice in the pharmaceutical industry: Drug companies compete for insurers’ business by offering secret rebates on their drugs. Companies that negotiate drug prices for insurers, called pharmacy benefit managers, can place drugs on tiers that determine how much consumers pay for them — decisions that may be influenced by the size of the discount granted by the drug companies.

The lawsuit claims that drug companies have been increasing the list price of insulin in order to …read more

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