In a setback to efforts to control insulin prices, a U.S. court judge tossed key accusations made in a high-profile lawsuit filed by the Minnesota Attorney General accusing three drug makers of price gouging.
The lawsuit, which was filed in 2018, alleged that Eli Lilly (LLY), Novo Nordisk (NVO), and Sanofi (SNY) fraudulently set artificially high wholesale prices, but then negotiated lower prices by paying rebates and discounts to pharmacy benefit managers. In turn, pharmacy benefit managers create lists of medicines that receive preferred insurance coverage known as formularies. But the negotiations are confidential.
The state argued that wholesale prices were so different from secretly negotiated net prices — or the prices after deducting rebates — that it was impossible to determine the true cost of insulin. For instance, the state pointed to a vial of the HumaLog insulin sold by Lilly, which increased from $122.60 in 2011 to $274.70 in 2017.