Insulin Pricing Litigation
Insulin was discovered in 1921 and was harvested from animals until 1978 when the first biosynthetic human insulin was developed. Humulin, the first biosynthetic human insulin product, was reviewed and approved by the FDA on October 28, 1982. Additionally, very few scientific advances in insulin have occurred since the 1980s. Despite the prominence of the disease and the long understood treatment with insulin, the costs associated with diabetes treatment in the United States are exceedingly high. A 2022 Yale study found that 14% of insulin users, approximately 1.2 million people, in the United States face “catastrophic” levels of spending on insulin, meaning they spent at least 40% of their post-subsistence income on insulin. The over-pricing of insulin has led to countless articles, exposés, documentaries, and even congressional investigations all highlighting the gravity of the problem and its causes. The insulin manufacturers and PBMs’ pricing scheme has exacerbated this epidemic, costing millions of dollars to organizations just like you.
DEFENDANTS & THEIR LIABILITY
Insulin prices have skyrocketed over the past 20 years, despite the drug being over 100 years old, decreased manufacturing costs, and minimal innovations regarding the drug since its initial formulation. Since 2003, the list price of certain insulins has increased by more than 1000%, greatly outpacing the inflation rate for consumer goods and services.
MANUFACTURERS
- Eli Lilly
- Novo Nordisk
- Sanofi
PHARMACY BENEFIT MANAGERS (PBM)
- Express Scripts
- CVS Caremark
- OptumRx
WHY THE SKYROCKETING PRICES?
Even though prices have increased dramatically, the production costs of insulin have decreased with efficiency and optimized processes. A September 2018 study found that a reasonable price of a year’s supply of human insulin, based on production costs, should be $48 to $71 per person, which would still deliver generous profits to manufacturers. Another study found that manufacturers could be profitable charging less than $2 per vial for insulin. However, the average diabetic spent $5,705 on insulin in 2016. What about research? There have been minimal innovations to insulin since the 1990s. Manufacturers have invested only a small fraction of their outsized profits on research and development and the investments they have made have largely been on delivery devices rather than drug formulations. For example, Eli Lilly spent $395 million on R&D between 2014 and 2018. During that time, Eli Lilly spent $1.5 billion on sales and marketing for insulin and generated $22.4 billion in revenue from its insulin line. Similarly, Sanofi reported net sales of nearly $37 billion for its insulin products while only investing $902 million on insulin R&D. All of this begs the question: why have insulin prices increased so much? The answer is simple: greed.
HOW DOES THIS PRICING SCHEME WORK?
The insulin pricing scheme is based on two separate but related illegal activities:
- PBMs demand large, secret, and ever-growing “rebates” and other payments for preferred formulary placement, leading to increased prices for payors and plan members.
- Manufacturers increase their insulin prices in lockstep to accommodate larger rebates and maintain access to lucrative placement on PBMs’ standard formularies.
CAUSES OF ACTION
This misconduct by insulin manufacturers and PBMs gives rise to several legal claims. As we have done with existing clients, we would bring claims on your behalf for violations of RICO, deceptive and unfair trade practices, and for unjust enrichment. Through these claims, we will demand money damages and disgorgement for the excessive insulin prices you have paid in the past and we will seek to ensure that those rates are not charged to you in the future.
- RICO (RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT) Insulin manufacturers and PBMs have colluded in an effort to artificially increase insulin prices to achieve profits far exceeding the fair market value of the drugs and the services the PBMs provided. The federal RICO statute is an ideal vehicle to ensure they are collectively held accountable for the harm they have caused. The misconduct also supports a claim for civil conspiracy, which typically requires evidence similar to the evidence supporting a RICO claim.
- UNFAIR AND/OR DECEPTIVE TRADE PRACTICES In collaborating to artificially and excessively inflate the price of insulin, the insulin manufacturers and PBMs engaged in unfair and deceptive trade practices that are actionable in most States. PBMs misled payors regarding the fair market price for diabetes medications and concealed their agreements with insulin manufacturers and company-owned pharmacies while skimming profits that rightfully should have been passed along to payors.
- UNJUST ENRICHMENT This claim seeks reimbursement of monies paid over to the PBMs and manufacturers that rightfully should have remained in payors’ pockets. The PBMs and manufacturers unjustly obtained monies through the insulin pricing scheme and they should not be permitted to retain them. Your overpayments should be returned to you.
The claims described above will seek significant equitable and monetary relief. Potential remedies include: Money wrongfully paid for artificially inflated insulin prices on behalf of your insured beneficiaries. For some claims, the damages awarded can be trebled – not only compensate you for the expenses you have wrongfully incurred, but also to deter similar future behavior from these defendants and others like them. Injunctive relief to stop the insulin pricing scheme. This would ensure that you and your members do not suffer monetary harm in the future. Disgorgement of ill-gotten gains on the part of the PBMs and manufacturers. Punitive damages designed to punish past misconduct and to deter future misconduct.
POTENTIAL REMEDIES
The claims described above will seek significant equitable and monetary relief. Potential remedies include:
- Money wrongfully paid for artificially inflated insulin prices on behalf of your insured beneficiaries. For some claims, the damages awarded can be trebled – not only compensate you for the expenses you have wrongfully incurred, but also to deter similar future behavior from these defendants and others like them.
- Injunctive relief to stop the insulin pricing scheme. This would ensure that you and your members do not suffer monetary harm in the future.
- Disgorgement of ill-gotten gains on the part of the PBMs and manufacturers.
- Punitive damages designed to punish past misconduct and to deter future misconduct.
We work with a consortium unlike any other. The combination of preeminent firms that comprise our group gives us the collective power to successfully litigate against these industry giants. We are prepared to hold these mega-corporations accountable, as we have done many times in past cases. Each of the firms in our consortium is nationally recognized and has established a reputation for its willingness and ability to litigate complex cases to trial and beyond. We have fought and won cases against corporate behemoths including BP, DuPont, 3M, Bayer, Johnson & Johnson, and the full complement of opioid manufacturers, distributors, and pharmacy chains. In short, litigating complex cases is what we do. At the same time, we understand when and how to resolve complex, multidefendant cases and have done so on scores of occasions. We are committed to ensuring you are reimbursed for the overpayments you have made for insulin products along with lowering your insulin costs going forward.
About the Firm
Founding Partner Tom Young has recovered hundreds of millions of dollars for governmental entities and individual victims of various major disasters over the past 25 years, including the 2010 BP Deepwater Horizon oil spill in the Gulf of Mexico, the 2015 Volkswagen “dieselgate” emissions scandal, recent devastating hurricanes along the East Coast, the ongoing nationwide opioid epidemic, PFAS “forever chemical” contamination and more. The firm also represents individuals in mass tort actions who were allegedly harmed by various dangerous and defective products such as the herbicides Roundup and Paraquat, medical devices like hernia mesh, the pharmaceutical Zantac, talcum powder based consumer products (baby powder), infant formula associated with necrotizing enterocolitis in premature newborns, and service member veterans harmed by water contamination at Marine Corps Base Camp Lejeune.
Young holds a Bachelor’s of Arts in Economics and a Juris Doctor, with Honors, from the University of Florida Levin College of Law. While there, Young was one of the first students awarded a Certificate in Environmental & Land Use Law. Young’s practice includes educating and assisting consumers, businesses, nonprofit organizations and government entities in understanding their rights as they pertain to losses due to negligence or disaster, in both state and federal court. Importantly, we only represent plaintiffs, not defendants, and never insurance companies.
He is a member of the Phi Eta Sigma National Honor Society, the Golden Key International Honor Society, the Florida Bar, the District of Columbia Bar, the State Bar of Arizona, the Bar of the Supreme Court of the United States, the Trial Lawyers Association of Metropolitan Washington, D.C., the Florida Justice Association, the Arizona Association for Justice, and the American Association for Justice. Young was the 2012-2018 President of the Civil Justice Foundation and a former AAJ state delegate.
Patrick Mickler has extensive experience in the legal industry representing clients in complex national mass tort litigations involving product defects and pharmaceuticals as well as general negligence matters. Mickler has also assisted clients, including governmental entities, in various major disasters, including the nationwide opioid epidemic, and the ongoing PFAS “forever chemical” environmental catastrophe.
In addition to his work as an attorney, Mickler is also a principal of The Injury Board (IB), an exclusive membership organization of well-respected plaintiff trial law firms across the United States, United Kingdom, and Canada committed to preserving the civil justice system. Mickler often leverages relationships formed through IB to joint venture with member firms on numerous mass tort cases.
Mickler holds a Bachelor’s of Arts degree from Washington and Lee University in Journalism and a Juris Doctor, summa cum laude, from Mitchell Hamline School of Law. He is a member of the American Association for Justice, The Florida Justice Association, and the Trial Lawyers Association of Metropolitan Washington, D.C., as well as the Florida Bar and the District of Columbia Bar.