It’s no secret that medical care is expensive. We’ve heard all about the rising cost of health insurance, not to mention the EpiPen scandal that outraged many people. But, it turns out that those with allergies aren’t the only ones struggling to keep up with their medical expenses. Now, insulin prices are on the rise, and diabetes patients are not happy about it.
Millions of Americans rely on insulin to survive, but the life-saving injections have become unaffordable for many patients, and they feel that drug companies are to blame. A group of diabetes patients has just filed a lawsuit against three drug companies for allegedly “systematically increasing the list prices of insulin for years,” leaving patients with extremely high out-of-pocket expenses, according to the The Washington Post.
To put things into perspective, 20 years ago, a version of insulin called Humalog was launched and priced at $21 a vial. Since then, The Washington Post reports that the price increased to $255 a vial. Competitors’ prices also continue to rise, which leads many to believe the pricing is done in collusion. Some patients now spend as much as $900 per month on insulin, according to the lawsuit.
This particular lawsuit is focused on the practice of rebates, in which drug companies compete for insurers’ business by offering secret rebates on their drugs. This common practice involves pharmaceutical companies negotiating with pharmacy benefit managers to determine how much consumers end up paying for the drugs, according to Consumerist.
The problem with this, the lawsuit alleges, is that drug companies hike the list prices for insulin so they can offer bigger rebates to insurance companies, while passing on the cost on to consumers. This puts patients, particularly those who don’t have insurance or who have high-deductible plans, in a predicament. According to the lawsuit, this practice violates the Racketeer Influenced and Corrupt Organizations Act and state consumer protection laws.
“I think that publishing a price that you know is artificially inflated and is not a real price—other than to one group of people—is a fraud,” Steve Berman, a partner in the with the law firm that is representing the plaintiffs, told The Washington Post.
Insulin companies argue that while list prices have risen, net prices—the amount drug companies are paid after rebates to insurance companies—have remained the same, according to The Washington Post.
“We are aware of the complaint and its characterization of the pharmaceutical supply chain,” Ken Inchausti, spokesman for drugmaker Novo Nordisk, said in an email to The Washington Post. “We disagree with the allegations made against the company and are prepared to vigorously defend the company in this matter.”