PHILADELPHIA (March 25, 2024) – District Attorney Larry Krasner on Monday announced that he had filed a lawsuit against nearly 20 pharmaceutical companies and pharmacy benefit managers (PBMs) for colluding to inflate the consumer cost of insulin, which has become cheaper than ever to produce. More than 1.1 million Pennsylvanians — 11% of the adult population — have diabetes. Approximately 14% of adults in Philadelphia are living with diabetes, according to a 2018 survey. It currently costs as little as $2 per vial to produce insulin, yet the price for patients now ranges from $300 to $700 – a shocking contrast to the $20-per-vial price of the 1990s.
A 2022 study in the Annals of Internal Medicine found that more than 1.3 million Americans with diabetes did not take their full prescribed daily doses of insulin because of the cost.
Despite recent consumer relief actions following an expansive 2021 Senate Finance Committee probe of collusion among the pharmaceutical companies and PBMs, as well as executive actions by the Biden Administration capping the cost of insulin for Medicare, a lack of tougher federal regulations and inconsistent policies among the states have effectively let the companies off the hook for their actions.
Among the companies named in DA Krasner’s lawsuit, Eli Lilly, Novo Nordisk, and Sanofi-Aventis produce roughly 90% of the global insulin supply. Meanwhile, CVS Caremark, Express Scripts, and OptumRx control approximately 80% of the PBM market. The named defendants are accused of violating the Pennsylvania Unfair Trade Practices and Consumer Protection Law (PUTPCPL).
“As the District Attorney of Philadelphia, I took an oath to seek justice. Justice requires attacking corporations that put profits ahead of the lives and well-being of the people,” DA Krasner said.
“After a congressional investigation and action by the President, these companies changed some of their ways. But that’s not justice yet. Justice means you also do what you can to make things right. And if you violate the law and there is a fine and if you are able to pay that fine, well, you have to pay it. Every Philadelphian knows this,” said Gregory B. Heller, partner at Feldman Shepherd Wohlgelernter Tanner Weinstock Dodig LLP. “At the end of the day, that’s what this Consumer Protection Law case is about. It’s about making billion-dollar healthcare conglomerates follow the same rules that ordinary Philadelphians have to follow every day.”
“We are pleased to partner with the Philadelphia District Attorney on this important litigation that aims to tackle one of the most important health issues of the day: prescription drug pricing. Public-private partnerships like the one between the District Attorney’s Office and outside counsel in this case help make it possible to hold the country’s largest corporations accountable for alleged wrongdoing,” Baron & Budd Shareholder Mark Pifko said. “We look forward to rolling up our sleeves and doing the hard work that will be necessary to bring justice to the people of the City of Philadelphia.”
The lawsuit contends that PBM defendants work in concert with the manufacturers to dictate the availability and price of insulin drugs for most of the U.S. market. The PBM defendants are, at once, a) the three largest PBMs in the United States; b) the largest pharmacies in the United States; and c) housed within the same corporate enterprises as three of the largest insurance companies in the United States — Aetna (CVS Health), Cigna (Express Scripts), and UnitedHealthcare (OptumRx).
At a press conference announcing his lawsuit on Monday, DA Krasner, a diabetic himself, was joined by fellow diabetes patients who shared their experiences of having struggled to afford insulin, as well as health care professionals and advocates fighting for a system that prioritizes saving lives and human wellness before profit.
“This suit is ultimately an easy choice, simply the right thing to do to protect working Philadelphians who can’t keep up with this constant, unjustified inflation of healthcare costs,” At-Large City Councilmember Nicolas O’Rourke said. “Diabetics — around 14% of adults in Philly — are dealing with a plain old scam, run by corporations playing around with people’s money over a drug they need to live and thrive. That must end, and I fully support the District Attorney’s Office’s working to address this malpractice.”
“For too long, monopolies have unjustly profited off medicine diabetic Philadelphians need to stay alive. It is unacceptable that patients pay up to $700 for insulin that costs as little as $2 to manufacture,” 3rd District City Councilmember Jamie Gauthier said. “I am grateful District Attorney Krasner recognizes that the City of Philadelphia cannot sit on the sidelines as Big Pharma artificially inflates the cost of insulin to line their pockets, at our expense. We’ll see you in court.”
“I have organized my life around having access to quality insurance, knowing that even a short lapse in health coverage could cost me thousands of dollars. A few times I have been between jobs and had to pay out of pocket for insulin and other medical supplies. I am lucky I have only had to do this a few times,” said Jesse Braxton, a diabetic and public educator in Philadelphia. “I have read heartbreaking stories of diabetics who lost their lives because they couldn’t afford a vial of insulin, with loved ones later finding empty vials left in their home that they had drained until the last drop. It is unconscionable that we would allow this to continue. I applaud DA Krasner’s decision to take action.”
Joshua Rinaman of Johnstown, Pa., has been managing Type 1 diabetes since the age of 11. He described how disruptions in access to effective medication adversely impacted his health and well-being.
“A couple of years ago, my insurance company tried to force me to switch to a less effective insulin because it was cheaper. This different drug was not only less effective than the insulin I had been taking, it inflicted unpleasant side effects that affected my ability to concentrate and focus. Fortunately, I had a doctor who advocated for me, and within several months I was able to again access the insulin that was the most effective for me. Everybody who has diabetes should have access to the medication that is best for them,” Rinaman said. “It’s terrifying to think that people with diabetes are forced to ration or settle for a less effective insulin because of greed on the part of pharmaceutical companies and insurance companies. Every top prosecutor in Pennsylvania should also be taking on corporations that harm people just to make an extra buck.”
Also joining DA Krasner for the lawsuit announcement on Monday were leaders of the Pennsylvania Association of Staff Nurses and Allied Professionals (PASNAP) as well as Put People First! PA, a statewide grassroots organization that fights for affordable healthcare.
DA Krasner’s lawsuit can be found on PhillyDA.org.
CONTACT:Jane Roh, 215-686-8711, [email protected]
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The Philadelphia District Attorney’s Office is the largest prosecutor’s office in Pennsylvania, and one of the largest in the nation. It serves the more than 1.5 million residents of the City and County of Philadelphia, employing 600 lawyers, detectives, and support staff. The District Attorney’s Office is responsible for the prosecution of approximately 40,000 criminal cases annually. Learn more about the DAO by visiting PhillyDA.org.