Following on the heels of Kansas’ lawsuit against three insulin manufacturers and pharmacy benefit managers (PBMs) over illegal marketing practices and overcharging patients, California Attorney General Rob Bonta announced a similar lawsuit, Jan. 12. 

Both the lawsuit filed by Bonta and the one filed by Kansas Attorney General Derek Schmidt, who filed suit Dec. 2, 2022, target Eli Lilly and Company, Sanofi-Aventis U.S. LLC, and Novo Nordisk Inc. These manufacturers make up a combined 99% stake of the insulin currently on the U.S. market. 

The lawsuits filed by Bonta and Schmidt also name three PBMs: CVS Caremark, Express Scripts, and OptumRx, which oversee pharmacy benefits for approximately 80% of managed prescription claims. The lawsuit accuses PBMs of being incentivized to negotiate higher rebates for drugs instead of the lowest price for consumers. Consequently, uninsured or underinsured patients may have to pay the full, inflated price of insulin.

According to AG Bonta’s office, the three PBMs “have leveraged their market power to overcharge patients.” The California AG’s office cites a 2021 RAND report that found that insulin costs roughly 10 times more in the United States than in other countries. 

The alleged unlawful, unfair, and deceptive business practices of the insulin manufacturers and PBMs are a violation of California's Unfair Competition Law.

Due to the high cost of insulin, many people living with diabetes are unable to afford the life-sustaining drug. As a result, those unable to afford insulin have to ration its use, to sometimes fatal effect. This occurs in some cases even when they have health insurance. 

“With today's lawsuit, we're fighting back against drug companies and PBMs that unacceptably and artificially inflate the cost of life-saving medication at the expense of vulnerable patients,” AG Bonta stated. 

Bonta added, “No one should be forced to ration or go without basic medication that could mean the difference between life or death. California will continue to be a leader in the fight to ensure everyone has equal access to affordable healthcare and prescription medications they need to stay healthy.”

Type 2 diabetes accounts for approximately 90-95% of all diabetes cases, and according to the California Department of Public Health, Hispanic and Black people are much more likely to be diagnosed with type 2 diabetes. According to AG Bonta’s office, The California Health and Human Services Agency (CalHHS) says that as many as 1 in 4 diabetics cannot afford their insulin.