The attorney representing Oceanside Unified School District announced on Wednesday that it was suing three drug companies and pharmacy benefit managers for collusion in hiking up insulin costs.
Some of those companies, however, are already calling the legal action baseless.
Oceanside Unified School District is one of more than 200 school districts joining in the lawsuit nationwide. The attorney representing it says they’re anticipating more districts from San Diego County to come forward.
“Our school districts, we’re going to seek all the money that they’ve overpaid,” said attorney James Frantz, the CEO of Frantz Law Group said.
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The lawsuit accuses Eli Lily and Co., Novo Nordisk and Sanofi of colluding with Express Scripts, CVS Caremark and Optum Rx in inflating the price of insulin paid by the Oceanside Union District’s self-funded health plan.
The 200-page complaint alleges that pharmacy benefit managers would secure billions of dollars in rebates from drug companies, and, in exchange, they would include their insulin products on the ist of approved drugs, known as formularies.
It also mentions that drug manufacturers would falsely raise their prices to pay for those rebates.
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“Every cost that they pay for a drug is extremely important because the higher the cost of the drug, the more they pay and the less money they have in their budget for other things like education, the school, the children and the teachers,” Frantz said.
Frantz believes the inflation of prices has been happening for at least 10 years, costing school districts across the country hundreds of millions of dollars and in some cases, even peoples’ lives.
“Throughout our investigation, we’ve learned about people that could not afford insulin, could not afford the $1,000, $1,400 a vial, and they didn’t take it and they died,” Frantz said.
Frantz said the price of insulin is drastic when compared with how much it costs in other parts of the world.
“If you were to buy Ozempic — and Ozempic is one of the insulin drugs we’re talking about here — if you were to buy that in Europe, it’s $125 for one dose," Frantz said. "In the United States, up to $1,400.”
In a statement to NBC 7, Eli Lily said, in part:
“These allegations are baseless. It is the school district and other health plans — not Lilly — who negotiate the terms of their rebate arrangements, including whether to pass those rebates on to people who take insulin.”
CVS Caremark also responded, saying, in part,
“Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture ... we intend to vigorously defend against this baseless suit.”
According to the complaint, three pharmacy companies named in the lawsuit control more than 90% of the market for insulin, leaving very few options.
