Class Action Lawsuit Claims to Reveal Collusion Among Big Pharma Companies

• Author: William Asher
• Posted: 2024-05-26

Sky high prices for medical essentials are always frustrating, and in some situations, they might even be illegal. A new lawsuit filed in New York alleges that several major companies were working together to fix prices and deny discounts to low-income patients. If the lawsuit claims prove to be true, it could result in some shocking changes.

Lawsuit Alleges Major Companies Restricted Access to Discounted Drugs

Last week, a group of healthcare clinics announced a lawsuit against Sanofi, Novo Nordisk, Eli Lilly, and AstraZeneca. The lawsuit claims that these four companies worked together to fix prices. The issue goes back to the summer of 2020, when an executive order from Donald Trump required drug companies to offer insulin to community health centers at a special discounted rate.

The companies spent millions lobbying against the law requiring them to provide 340B drug discounts for insulin. When this failed, the lawsuit alleges that the companies all began restricting 340B drug discounts. Reducing the amount of product available to clinics that rely on 340B clinics then allowed the companies to sell their drugs to other higher-paying healthcare providers instead. Essentially, the lawsuit argues that these four companies worked together to restrict discount access and drive the price of insulin up.

Countless Patients Were Forced to Pay More for Insulin

The higher insulin prices had a disastrous effect on the diabetic community. Some smaller clinics that relied on 340B discount sales were unable to get enough insulin to fulfill patient needs. Other clinics resorted to paying more and increasing charges. The end result was that diabetic patients were forced to pay more for a life saving medication.

This lawsuit is just one of the latest complaints about insulin prices. In the past seven years, the price of insulin has almost doubled. The average patient with diabetes pays about $6,000 per year for the medication that can prevent amputations, blindness, strokes, and other serious complications of diabetes. For low income patients, higher insulin prices can be an impossible burden.

Despite patients with diabetes being the main victims, they are not the focus of the lawsuit. Instead, the class action suit is being presented on behalf of the healthcare clinics that were forced to pay extra for insulin. They hope to receive compensation for the abnormally high prices they had to pay and stop further price fixing. If they win, the lawsuit settlement could help the clinics to provide better care to low income patients.

Attorneys Have Not Provided Proof of Collusion Yet

The lawsuits claims are very concerning, but it is important to note that the lawyers have not set forth any definitive proof of collusion. Instead, their lawsuit just claims that the timing and effect of the companies' behavior is proof of collusion. The attorneys point out that all four companies quit providing as many 340B drug discounts at the same time.

If even one of the companies was operating independently, they could have swooped in and gathered up a lot of valuable government contracts. The only reason the companies were able to drive the price up is because none of them were willing to offer insulin at a lower price. Therefore, the attorneys argue collusion is the only reasonable explanation for the companies' actions.

Losing This Lawsuit Could Force Companies to Provide Affordable Insulin

Whether or not this argument will hold up in court remains to be seen. However, if the attorneys can provide more proof and present a logical case, there is a chance that all four companies could lose the case. This could be a major win for affordable healthcare advocates. In 2019, there were previous attempts to charge three of the four companies with RICO anti-trust laws. The former suit failed to prove the companies were forming an intentional monopoly, but their suspicious behavior in 2020 provided another chance.

If the court decides that there was collusion, the four companies face many severe consequences. Most importantly for healthcare clinics and diabetic patients, they could be forced to lower insulin prices. The companies could also be required to pay fines, and any individuals involved could eventually face criminal charges as well. This could ultimately be the first step in reducing abnormally high drug prices throughout the nation.