Lawsuit accusing Sanofi, Eli Lilly of scheming to inflate drugs' prices pared down
New Delhi: A federal judge on Friday pared down a class action lawsuit brought by consumers accusing three of the biggest makers of diabetes drugs, Novo Nordisk, Sanofi SA and Eli Lilly & Co, of scheming to inflate the drugs' prices.
U.S. District Judge Brian Martinotti in Newark, New Jersey, ruled that claims under the racketeering laws of several states (except for Arizona's) must be dismissed because the laws do not allow claims by plaintiffs who bought the drugs through intermediaries, such as insurance companies, rather than from the drugmakers directly.
The decision does not affect claims in the case brought under various state consumer protection laws.
The 2017 lawsuit involves the insulin analog drugs NovoLog and Levemir by Novo Nordisk, Sanofi's Lantus and Humalog by Lilly.
The 80 named plaintiffs in the case, patients who paid out-of-pocket costs for the drugs through their insurance, claim the three companies raised their public benchmark price for insulin products while effectively charging lower prices to large pharmacy benefit managers by paying them rebates and administrative fees in exchange for favorable placement on PBMs' drug formularies.
In February 2019, Martinotti dismissed claims under the federal Racketeering Influenced and Corrupt Organizations (RICO) Act, finding that the law did not allow indirect purchasers to sue.
The plaintiffs subsequently amended their case to bring racketeering claims under state laws similar to RICO in Arizona, Colorado, Georgia, Utah and Wisconsin.
Insulin pricing has come under heavy scrutiny in recent years. The three insulin makers were highlighted in a Congressional report earlier this month which found that drugmakers have targeted the U.S. market to earn outsized profits from old medicines.
Martinotti earlier this year allowed federal RICO claims to proceed in a separate class action against the companies brought by direct purchasers.
The case is In re Insulin Pricing Litigation, U.S. District Court, District of New Jersey, No. 2:7-cv-00699.
For plaintiffs: Steve Berman of Hagens Berman Sobol Shapiro
For Novo Nordisk: James Rouhandeh of Davis Polk & Wardwell
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