OKLAHOMA CITY – State Attorney General Gentner Drummond filed a lawsuit against major diabetic drug manufacturers and pharmacy benefit managers for “an unfair and deceptive pricing scheme that has cost Americans billions of dollars.”
Alleging violations of the Oklahoma Consumer Protection Act, Drummond said manufacturers have significantly raised the prices of their diabetes drugs in lockstep during the last 15 years despite the fact that the costs of producing the critical drugs have diminished. And he said manufacturers and PBMs – which are “at the center of the convoluted pharmaceutical payment chain” – coordinated closely to control drug prices and drug purchasing behavior.
The lawsuit, filed May 14 in Cleveland County District Court, names as defendants Eli Lilly and Co., Novo Nordisk Inc, Sanofi-Aventis U.S. LLC, Evernorth Health Inc. (formerly Express Scripts Holding Co.), Express Scripts Inc., Express Scripts Administrators LLC, Esi Mail Pharmacy Service Inc., Express Scripts Pharmacy Inc., Medco Health Solutions Inc., CVS Health Corp., CVS Pharmacy Inc., Caremark Rx LLC, Caremark-PCS Health LLC, Caremark LLC, UnitedHealth Group Inc., OptumRx Inc. and Optuminsight Inc.
Eli Lilly, Novo Nordisk, and Sanofi manufacture “the vast majority of insulins and other diabetic medications available in Oklahoma,” the lawsuit claims.
CVS Caremark, Express Scripts, and OptumRx “collectively dominate the pricing system for the at-issue drugs,” according to the lawsuit. Their dominance “results from the reality that these three corporate actors are, at once (1) the largest pharmacy benefit managers in the United States and in Oklahoma (controlling approximately 80% of the PBM market) and (2) the largest pharmacies in the United States and in Oklahoma” (comprising three of the top five dispensing pharmacies in the U.S.). “These PBM conglomerates sit at 4th (CVS Caremark), 5th (OptumRx) and 13th (Express Scripts) on the Fortune 500 list ranking largest corporations by revenue.”
If the three primary PBMs do not include a drug on one of their standard formulary offerings, “it is not available to 80% of Oklahoma’s citizens,” the lawsuit alleges.
“It is despicable that these companies preyed upon Oklahomans who were desperate for life-saving medication to bolster their profits,” Drummond said. “The outrageous profits these companies obtained through deceptive business practices need to be paid back through restitution or rescission.”
It costs the manufacturers named in the lawsuit less than $2 per vial to produce insulin, according to the filing. Yet the drugs, which sold for $20 in the late 1990s, now range between $300 and $700. In the last decade, the manufacturer defendants have hiked the price of their insulin up to 1,000%, Drummond charged.
“A friend was telling me about the cost of insulin, especially if you don’t have insurance,” state Rep. Rande Worthen (R-Lawton) told Southwest Ledger three years ago. “The cost is just terrible.”
“The current unlawfully inflated price stands in stark contrast to insulin’s origins: the discoverers sold the original patent for $1 to ensure that the medication would remain affordable,” Drummond’s lawsuit states. “Today, insulin has become the poster child for skyrocketing and inflated drug prices.”
The Oklahoma Legislature passed a measure in 2021 that capped the price for a 30-day supply of insulin at $30, and $90 for a 90-day supply, for each prescription covered by insurance. Co-pays are based on individual insurance plans.
House Bill 1019 was authored by Worthen and former Sen. Frank Simpson (R-Ardmore), and was signed into law by Gov. Kevin Stitt.
Insurance companies “worked alongside us on this measure,” Worthen added. “We couldn’t have done it without their support.” The state Insurance Commissioner is authorized to enforce the price cap, HB 1019 stipulates.
All diabetics paying inflated insulin prices “Whether insured or not, all Oklahoma diabetics pay a substantial part of their diabetic drug costs based on the false list prices generated by the Insulin Pricing Scheme,” Drummond charged in his 130-page lawsuit.
Uninsured diabetics “must pay the full, point-of-sale prices (based on the artificially high prices generated by the Insulin Pricing Scheme) every time they fill their prescriptions,” the lawsuit notes.
Approximately 14% of this state’s population – or 575,000 Oklahoma residents – is uninsured, and approximately 18% of uninsured Oklahomans are diabetic, Drummond states in the lawsuit.
Insured diabetics, too, “often pay a significant portion of a drug’s price” in “exorbitant, indefensible out-ofpocket costs” and include including deductibles, coinsurance requirements, and/ or copayment requirements “based on the artificially inflated list prices…” “Approximately 200,000 Oklahomans have Type 1 diabetes, requiring daily usage of insulin,” Simpson said. Simpson has been an advocate for Oklahoma’s diabetic community since his granddaughter’s death from complications related to Type 1 diabetes.
Insulin, a hormone that helps convert food into energy, is critical to controlling blood sugar levels in diabetes patients. Type I diabetes is caused when a person’s body does not produce enough insulin, resulting in high levels of blood sugar or glucose. This puts them at risk of serious health complications. There is no known way to prevent or cure Type 1 diabetes.
“Unfortunately, because of continually increasing prices, many diabetics ration their insulin or go without, putting their health and lives at further risk,” Simpson said. HB 1019 is “a common- sense approach that has already been approved in several other states,” he said.
“Companies shouldn’t be allowed to profit from life-sustaining medicines such as insulin.”
“As a direct result of the Insulin Pricing Scheme, one in four Oklahoma diabetics can no longer afford their diabetes medication and are forced to ration and skip doses,” Drummond’s lawsuit alleges. “This forced lack of adherence leads to substantial additional healthcare costs.”
The total estimated cost of diagnosed diabetes in Oklahoma is $6 billion annually, Drummond said. One of every four health care dollars “is spent caring for people with diabetes,” he wrote.
Oklahomans with diabetes have medical expenses approximately 2.3 times higher than those who do not have diabetes, research indicates.
Diabetes ‘an epidemic, and public health crisis’ Diabetes is “an epidemic and a public health crisis in Oklahoma,” Drummond related in his lawsuit. Approximately 450,000 Oklahoman suffer from diabetes, and approximately 1.6 million more have prediabetes, “which is when a person’s blood sugar level is higher than it should be and signifies that the person is at greater risk for developing” the disease.
Diabetes is the seventh leading cause of death in Oklahoma, giving this state the fourth-highest age-adjusted diabetes death rate in the nation. Diabetes is the leading cause of blindness, amputation, heart disease, kidney failure and early death – all of which are preventable with proper management.