States cry foul at Lilly’s $13.5 mln insulin class action settlement

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Eli Lilly

States cry foul at Lilly’s $13.5 mln insulin class action settlement

Aug 16 (Reuters) – Nine U.S. states are objecting to a proposed $13.5 million settlement between Eli Lilly and Co (LLY.N) and a class of insulin buyers over claims that it inflated the drug’s price, saying the drugmaker is wrongly trying to use the deal to shield itself from future lawsuits by states.

In a filing on Tuesday in Newark, New Jersey, federal court, lawyers for Arizona, Mississippi and Minnesota urged U.S. District Judge Brian Martinotti to delay final approval of the deal until it is changed to make sure that states can still sue over insulin prices.

“Lilly’s brazen attempt to weaponize its tentative settlement against other attorneys general litigating against the company threatens the sovereign interests of states, including the intervenor states to enforce their state laws,” they said.

They joined previous, similar objections lodged by Illinois, Nebraska, Utah, Arkansas, Kansas and Montana.

Lilly and a lawyer for the settling plaintiffs did not respond to a request for comment.

Indiana-based Lilly sought approval for the settlement in May that would resolve litigation against the drugmaker dating back to 2017. In addition to the cash payment, the company agreed to cap out-of-pocket insulin costs at $35 for four years.

People who paid out-of-pocket cost for Lilly’s insulin drug Humalog accused the company, along with competitors Sanofi and Novo Nordisk, of inflating the drug’s list price while offering steep discounts to the pharmacy benefit managers (PBMs) that determine what drugs are available through insurance plans.

That created an incentive for the PBMs to keep listing the drugs despite the ballooning prices, while forcing patients to pay more, the plaintiffs said.

While the lawsuit has been pending, the federal Inflation Reduction Act capped out-of-pocket insulin costs for Medicaid beneficiaries at $35, and many states have capped it at $35 or less.

Arizona, Mississippi and Minnesota said that Lilly refused to add language to the settlement making clear that state attorney generals will still have the right to sue on behalf of their citizens.

In a separate filing Monday, the other six states also argued that, since they had all already capped insulin costs at $35 or less, Lilly was trying to settle claims valued at about $1 billion for something that it was already compelled by law to provide.

The case is In re Insulin Pricing Litigation, U.S. District Court, District of New Jersey, No. 2:17-cv-00699.

For plaintiffs: Steve Berman of Hagens Berman Sobol Shapiro

For Lilly: James Hurst of Kirkland & Ellis

For the states: Jennifer Borek of Genova Burns; and Bruce Greenberg of Lite DePalma Greenberg & Afanador

Reporting By Brendan Pierson in New York

Source: Reuters