Drug makers accused of conspiring to hike insulin prices

Published: Feb. 22, 2017 at 4:46 PM EST
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More than 29 million Americans live with diabetes and for many of them, insulin is a life or death medication. Between 2002 and 2013, the price of insulin more than tripled, and a federal lawsuit accuses the three insulin manufacturers of conspiring to raise their prices. The drug makers deny the allegations.

CBS News correspondent Anna Werner reports the sticker shock has left some patients with impossible choices.

"I'm so sorry to see you again in the hospital…." A cell phone video shows Dr. Claresa Levetan talking to her patient Shawna Thompson back in the hospital because she couldn’t pay for her insulin.

“One vial of insulin costs how much for you?” Levetan asked.

“One hundred and seventy-eight dollars,” Thompson responded.

It was the fourth time in just over a year that Thompson had to be treated for a life-threatening diabetic coma.

“Patients come in and say I can’t afford to take it, so I’m not.” Doctor Levetan said that it’s common for her now to hand out free drug company samples of insulin, just so patients can stay on their lifesaving medication.

“Patients are begging for samples because they can’t afford the insulin,” Levetan said.

“Not asking, you’re saying, begging,” Werner said.

“Begging,” Levetan said.

Like 74-year-old Kathleen Washington. Some months, her insulin runs over $300 a month – more than she can afford.

“I must pay my mortgage,” Washington said.

If it’s a choice between the mortgage and the insulin, “It’s going to be the mortgage,” she said.

Investment research firm SSR Health analyzed insulin list prices from 2012 to 2016 for the three companies that manufacture it, and found prices went up between 99 and 120 percent.

In a separate analysis, SSR Health’s Richard Evans also found a striking pattern: the prices of two prime insulin drugs rose in lockstep – mirroring each other – 12 times between 2008 and 2014.

“The two companies took price increases within days of one another, and the price increases were similar – even identical – to the percentage point,” Evans said.

“If you raise your price, and I raise my price to the same level, what am I saying to you as a company?” Werner asked.

“Let’s keep going, or, I’m not going to fight you,” Evans said.

Vermont Sen. Bernie Sanders is calling for a federal investigation, alleging collusion among the three drug companies: Eli Lilly, Novo Nordisk and Sanofi.

“Just coincidentally it happens that the three major suppliers of insulin seem to be raising their prices at the same exact time, at the same level. So I think you have to be very naïve not to believe there is collusion,” Sanders said.

The companies deny they’ve broken any laws. Sanofi told CBS News there is “strong competition” on price. Eli Lilly said it is “aggressively competing on net (or negotiated) price,” and Novo Nordisk’s president said on the company’s website that increasing list prices is designed to offset rebates and price concessions to maintain profitability.

Lori Reilly, with the trade group that represents U.S. pharmaceutical manufacturers, told CBS News, “I don’t believe there’s been collusion by our companies.”

She pointed out although the drug companies list prices are up, the negotiated prices for insulin, what the industry calls “net” prices, have gone up just 2 to 3 percent overall. She said that’s because intermediaries called pharmacy benefit managers, or PBMs, negotiate for rebates from drug companies, take a fee, then pass those lower “net” prices on to insurance companies and ultimately consumers.

The problem, Evans said, is patients who have high deductibles or little or no insurance don’t get those discounted prices.

“So in other words, the people who can least afford these increases are the ones who get hit by them,” Werner said.

“Everybody gets hit by them a little bit, but people that can’t afford it get hit disproportionately,” Evans said.

But Reilly said, “When you look at the evidence, the competitive marketplace is working, and it’s working very aggressively to help keep drug cost increases in check.”

“I’m listening to that statement and I’m hearing consumers go, ‘Are you kidding me?’” Werner said.

“There is an issue for many patients who today face increasing deductibles,” Reilly said. “If those patients are coming to the pharmacy counter and they’re paying full list price, while their insurance company or pharmacy benefit manager has bought that drug at a 50 or 60 percent discount, that is a problem.”

The country’s largest pharmacy benefit manager told CBS News drug makers are the ones raising their prices. But experts say there’s plenty of blame to go around. Meanwhile, all three insulin manufacturers say they’ve announced new initiatives to make insulin more affordable.

Visit the Related Links section of this story for details of those initiatives.