Minnesota AG Swanson sues pharmaceutical companies for 'deceptive' insulin price increases

Minnesota Attorney General Lori Swanson filed a lawsuit against three pharmaceutical companies for allegedly deceptively raising the price of insulin, causing a financial strain on some in need of the life-saving drug.

Swanson filed the lawsuit Tuesday against Sanofi-Aventis U.S. LLC, Novo Nordisk, Inc. and Eli Lilly and Co. The lawsuit claims these companies are committing consumer fraud by creating two different price lists for their insulin. Swanson says they create a large retail price and then they offer big rebates to pharmacy benefit managers (PBM) who negotiate much cheaper prices for insurers. A larger rebate increases the likelihood a PBM puts that drug on a "formulary" or list of approved drugs that health plan policyholders can use.

“Essentially the insulin manufacturers create a phony artificial list price that really isn’t paid by anybody other than some uninsured people and underinsured people and people in the Medicare donut hole, but not paid by insurance companies and other purchasers,” said Swanson.  

People who have high deductible plans, are uninsured or receive Medicare end up paying the artificial list price. The price for some insulin products has doubled since 2011 and tripled since 2002.