Lake County filed a federal lawsuit Tuesday against three drugmakers and national pharmacy benefit management companies alleging they had worked together to artificially increase the cost of insulin.
The suit contends that major manufacturers of the diabetes treatment and pharmacy benefits managers (PBMs) have used their market power to increase profits at the expense of Lake County residents.
The suit names manufacturers Eli Lily, Novo Nordisk and Sanofi, and pharmacy benefit management companies CVS Caremark, Express Scripts, and OptumRx.
“These defendants have illegally conspired to unfairly increase their profits” Lake County State’s Attorney Eric Rinehart said in a statement. “Fair competition and enhanced technology should be driving prices down, but the defendants’ scheme raised prices on a drug that is necessary for millions.
“On behalf of our retirees and employees, and by extension the taxpayers of Lake County, we seek to recover costs that unfairly burdened Lake County as a result of this illegal pricing scheme,” he said.
A lack of competition means both the manufacturing and pharmacy benefits management sector can work together to aggressively increase the cost of the medication. PBMs, the suit said, select insulin products based on rebates they receive from manufacturers, and manufacturers increase prices which results in higher rebates for PBMs.
The arrangement violates federal RICO laws and state consumer protection regulations, the suit alleges.
Rinehart said there is no market-related reason that insulin prices have increased so dramatically — over 1,000% in some cases — over the past 25 years. The lawsuit, he said, is a, “fight for basic decency and fairness in our markets.”
“The Lake County Board has been striving to control the costs of its health insurance plans for its employees,” Board Chair Sandy Hart said. “Lawsuits like these tell companies that they must follow the rules and allow competition to benefit everyone. Along with State’s Attorney Rinehart, we will never stop fighting for basic economic fairness for everyone in Lake County.”
