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Arkansas AG sues drug companies over insulin price hike

Daniel Breen
Arkansas Attorney General Leslie Rutledge announces a lawsuit against drug makers and Pharmacy Benefit Managers in her downtown Little Rock office on Wednesday, joined by investigator Kym Armstrong and Deputy Attorney General Shannon Halijan.

Arkansas’ attorney general is filing a lawsuit alleging drug companies conspired to artificially inflate the price of live-saving drugs.

Attorney General Leslie Rutledge announced the lawsuit Wednesday against three major drug companies, as well as three companies known as Pharmacy Benefit Managers or PBMs, which manage prescription drug programs for health insurers.

“Manufacturers’ cost to produce insulin is about $2 per drug. In 1990, the synthetic drug sold for approximately $20 per drug. Today, the selling price has skyrocketed to between $300 and $700 per drug,” Rutledge said.

The lawsuit alleges drug makers Sanofi, Novo Nordisk and Eli Lilly conspired to fix the price of drugs as the three companies manufacture about 99% of all insulin on the market. Rutledge says the companies have continued to raise the price of insulin by as much as 1000% despite the cost of manufacturing the drug going down.

“And despite the decrease of the production cost of insulin, through simplified and optimized processes of manufacturing and minimal new research and development, the reported price of insulin has risen astronomically over the last 15 years… while no changes have occurred to the drug,” Rutledge said.

The lawsuit also names Express Scripts, Caremark and Optum, three PBMs which Rutledge said essentially sold access to their list of drugs approved by insurance plans to manufacturers.

“The PBMs pay the drug manufacturers the outrageous and inflated cost, because the PBMs give the drug manufacturers access to their approved drug list in exchange for keeping a significant portion of the manufacturers’ payments,” Rutledge said. “Essentially, the manufacturers are buying positions on the approved drug list, which increases revenues, and PBMs keep part of the payment.”

Rutledge says the lawsuit is being brought under the state’s Deceptive Trade Practices Act, which could force companies to pay as much as $10,000 for each instance of overcharging consumers.

More than 400,000 Arkansans have diabetes, with another 800,000 considered pre-diabetic. According to Rutledge, about 50,000 diabetic Arkansans are uninsured.

Daniel Breen is a Little Rock-based reporter, anchor and producer for KUAR.