The plaintiffs have accused three companies of raising
prices 150% over five years.
By Jef Feeley and Robert Langreth | February 18, 2019 at 04:08 AM
Novo Nordisk A/S and two other insulin makers must face claims they gouged
diabetes patients through deceptive price lists for their life-saving drugs.
U.S. District Judge Brian Martinotti in New Jersey on Friday allowed a
proposed class-action lawsuit filed by 67 diabetics against Novo, Eli Lilly
& Co. and the U.S. unit of French drugmaker Sanofi to proceed on
consumer-fraud allegations tied to skyrocketing insulin prices. The judge threw
out the plaintiffs’ racketeering claims.
The ruling comes as a growing number of cases targeting insulin makers’
price hikes have been filed in Martinotti’s court and gathered before the judge
for pretrial information exchanges. Plaintiffs contend companies are illegally
raising insulin prices to provide rebates for pharmacy-benefit managers who
decide which drugs get on preferred insurance lists.
“This ruling blows the insulin racket wide open,’’ said Steve Berman, a
plaintiffs’ lawyer who is one of the leaders of the potential class-action
case. The ruling “clears the way for us to begin obtaining discovery from the
manufacturers and PBMs so we can shine the light on exactly what has driven
insulin prices sky-high,’’ he said.
“We’re pleased with the court’s dismissal of the RICO claims and numerous
state law claims, and will continue to defend the company against any remaining
claims,” Ken Inchausti, a U.S.-based spokesman for Bagsvaerd, Denmark-based
Novo, the world’s biggest maker of insulin, said in an email.
Ashleigh Koss, a spokeswoman for Paris-based Sanofi, said while the
allegations in the suit are meritless, the company couldn’t comment on
Martinotti’s ruling because the case was ongoing. Gregory Kueterman, a Lilly
spokesman, said while the company would continue to defend itself from the
insulin allegations, he couldn’t comment on the judge’s decision.
The suit accuses the companies of raising insulin sticker prices by more
than 150% over five years, forcing diabetics to forgo the drug, take less
insulin than needed or use expired versions. The complaint notes some patients
intentionally failed to take proper amounts of insulin to wind up in emergency
rooms, where they could get free samples of the drug.
The crux of the suit targets the companies’ allegedly deceptive pricing
practices. Diabetics say insulin manufacturers’ sticker prices are different
from the prices insurers pay after discounts are awarded to pharmacy-benefit
managers. The patients contend the rebates amount to kickbacks for benefit
managers, who recommend which drugs should be covered by insurers. Higher list
prices mean larger-percentage rebates out of which PBMs take a slice.
The judge found patients could press ahead with claims that the rebate
system violated consumer-protection laws in states such as New Jersey, New
York, Wisconsin, Tennessee and New Hampshire, according to court filings.
While Martinotti agreed with the companies’ arguments that patients
couldn’t make a proper racketeering claim over the rebates, he gave plaintiffs
an opportunity to amend their suit to address defects in the claim.
The case is Chaires v. Novo Nordisk Inc., 17-cv-699, U.S. District Court,
District of New Jersey (Trenton).
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