County joins price-fixing lawsuit against insulin manufacturers, benefits managers
Corporation counsel says entering ligation is low risk, high reward
Macomb County has joined what is expected to be a national, class-action, price-fixing lawsuit against insulin manufacturers.
The county Board of Commissioners last month approved joining with Wayne, Washtenaw and Monroe counties in hiring Bernstein & Bernstein law firm for the legal action against pharmacy benefits managers and pharmaceutical manufacturers that claim excessive costs. The city of Detroit also was expected to join.
Macomb County Corporation Counsel John Schapka said the county “is getting in early” on the lawsuit. The four counties were the first in Michigan to file.
Oakland County has not joined.
“We agree that the cost of insulin — a common and life-saving drug — is outrageous,” said Bill Mullan, spokesman for Oakland County Executive Dave Coulter. “Our health-benefit situation is slightly different from other entities, and we are working to determine the impact for Oakland County government.”
The plaintiffs believe the insulin producers and benefits managers “have conspired to fix prices so there
is no competition in the market,” Schapka said.
The counties allege three insulin producers — Indiana-based
Eli Lilly and Co., Delaware-based Sanofi-Aventis U.S. LLC and Novo Nordisk Inc. — have engaged in a scheme with at least 15 pharmacy benefit managers to artificially inflate the price of insulin, according to court documents. The three primary pharmacy benefit manager defendants named in the lawsuit — CVS Caremark, Express Scripts, and OptumRx — control more than 80% of the pharmacy-benefit-manager market.
The counties are suing to recover damages associated with the costs that their employees, retirees and dependents, and other county programs have paid for insulin over the last 20 years.
Macomb County Executive Mark Hackel attended a Feb. 7 news conference with representatives of the other counties and Detroit announcing the litigation.
Macomb County expects to spend about $64 million in the 2024 budget for employees’ and retirees’ health care benefits. Roughly 2% of that will go for insulin costs, Hackel said.
“But it’s not just with our retirees and those that are active employees,” Hackel said. “We have a jail to maintain and we have to deal with managed care for inmates.”
The lawsuits come as the price of insulin has increased dramatically, nearly tripling between 2002 and 2013, according to the Journal of the American Medical Association Network.
The complaints were filed in the U.S. District Court for the District of New Jersey.
The pharmacy benefit managers and manufacturers are accused of violating the Racketeer Influenced and Corrupt Organizations
Act, the Sherman Anti-Trust Act, the Michigan Anti-Trust Act and the Consumer Protection Act, said Melvin Butch Hollowell, an attorney with the Miller Law Firm in Rochester, Michigan, at the news conference.
The benefits managers are third-party administrators of prescription drug programs for health plans including state government employee plans, commercial health plans and self-insured employer plans. They allegedly demand large rebates from the manufacturers in exchange for putting their insulin products on their preferred drug list and increasing sales, according to court documents. The local governments claim that the rebate amounts are kept secret, and the manufacturers continuously increase insulin prices and pass the costs on to the public, according to the allegations.
In a related matter, Eli Lilly and Co. announced in March 2023 that it would cut prices for some of its most commonly prescribed insulin products in the United States.
Schapka said joining the legal action is low risk. It has no cost to the county because Bernstein & Bernstein is working on a contingency basis.
He said it is similar to the mass opioids lawsuit in which the county is receiving about $1.5 million for 18 years.
“It’ won’t be that big but it will be substantial,” Schapka predicted.