On Friday, a case was removed from the Mississippi state court to the equivalent federal court. The original case was filed by Lynn Fitch, the state’s attorney general, against Eli Lily and Company, Novo Nordisk Inc., Sanofi-Adventis US LLC, Evenorth Health Inc. et al. The now-federal case is regarding the pricing of insulin as treatment for diabetes and the role of Pharmacy Benefit Managers (PBMs) in controlling the pricing narrative.
Injections of commercially produced insulin, first patented in 1922, are a long-standing solution for diabetes. While there have been several incremental improvements to this treatment including stability, delivery methods, and purity of the product, the basic product remains the same.
However, the pricing for the product has not remained stable according to the complaint; the plaintiff indicates that the base price for the product has gone up by 1,000% since 2003. This price increase, per the plaintiff, has impacted the State of Mississippi directly in the reimbursement of Medicaid billings for these purchases, as well as directly impacting the uninsured citizens of Mississippi.
The complaint also directly notes the role of PBMs in supporting and encouraging the higher prices. PBMs frequently negotiate the contractual discounts received by insurance companies from the manufacturers’ base pricing. The complaint alleges that PBMs have supported the higher base price in order to display a larger discount rate for the client insurance companies.
The complaint names several rebate and administrative fee schemas that PBMs participate in which allow the PBMs to receive a direct payment from the manufacturer in exchange for supporting a higher base price from the manufacturer as a part of the negotiations.
Mississippi is suing for violations of the Mississippi Consumer Protection Act and unjust enrichment, both as direct payor for Medicaid participants as well as in parens patriae for its citizens, as well as for civil conspiracy to inflate pricing. The defendants are represented by Watkins & Eager.
