Attorney General Ken Paxton has sued major insulin manufacturers and pharmacy benefit managers over a conspiracy to inflate insulin prices.
Pharmacy benefit managers are third-party companies that act as mediators between drug manufacturers and pharmacies.
According to the attorney general, insulin manufacturers allegedly raised insulin prices and then paid undisclosed portions back to PBMs to be included in the PBM standard offerings. PBMs then granted preferred status to the manufacturers who produce drugs with the highest listing prices—resulting in skyrocketing insulin prices.
Paxton explained that insulin manufacturers raised the prices of their insulin drugs up to 1,000 percent by using a pricing scheme that violates the Texas Deceptive Trade Practices Act.
This was reportedly done to take advantage of and profit from widespread rates of diabetes in the state.
“This is a disturbing conspiracy by which pharmaceutical companies were intentionally and artificially inflating the price of insulin,” said Paxton. “Big Pharma insulin manufacturers and PBMs worked together to take advantage of diabetes patients and drive prices as high as they could.”
“These companies acted illegally and unethically to enrich themselves, and we will hold them accountable,” he continued.
Several defendants named in the lawsuit include Eli Lilly, Express Scripts, and CVS Pharmacy.
By filing the lawsuit, the State of Texas is seeking to abate the harm caused by the insulin pricing scheme through injunctive relief.
Texas is requesting to halt further illegal actions on the part of insulin manufacturers and PBMs, restitution for damages, disgorgement—which would require companies to relinquish profits they illegally obtained, and civil penalties imposed on defendants, as well as covering the cost of attorney’s fees.
