State sues drug, pharmacy companies

Arkansas’ attorney general has filed a lawsuit against several drug and pharmacy companies for deceptively driving up the cost of insulin in Arkansas.

The lawsuit accuses drug manufacturers and pharmacy benefit managers of manipulating and inflating insulin and drug prices in Arkansas. It alleges Nova Nordisk, Sanofi and Eli Lilly conspired with Express Scripts, Caremark and Optum to significantly increase their revenues by unfairly making insulin and other diabetic treatments unaffordable for many diabetics in Arkansas and creating a financial burden for consumers.

Attorney General Leslie Rutledge said the state is suing the drug manufacturers and pharmacy benefit managers for violations of the Arkansas Deceptive Trade Practices Act, unjust enrichment and civil conspiracy. The state seeks injunctive relief, restitution, damages and civil penalties.

The lawsuit details an alleged scheme between drug manufacturers and pharmacy benefit managers to inflate the cost of insulin using an approved drug list for insurers. It seeks $10,000 per violation of the Arkansas Deceptive Trade Practices Act.

Pharmacy benefit managers listed in the lawsuit are CVS Caremark, Express Scripts and OptumRx, who collectively dominate the pricing system for the at-issue drugs. The three companies make up the largest pharmacy benefit managers in the nation and control about 80% of the market in Arkansas.

“Over the course of the last 15 years and pursuant to the Insulin Pricing Scheme, manufacturer defendants have in lockstep raised the prices of their respective diabetes drugs in an astounding manner, even though the cost to produce these drugs has decreased during that same time period,” the lawsuit states. “Insulins, which today cost manufacturer defendants less than $2 per drug to produce, and which were originally released at a list price of $20 per drug in the late 1990s, now carry list prices that range between $300 to $700 per drug.”