Insulin is a hormone necessary for human life that helps the body use glucose for energy. In the bodies of Type 1 diabetics, the pancreas does not produce insulin, and Type 2 diabetics do not respond well to insulin. Diabetics must thus inject or pump insulin.[i]

About 6 million diabetics in the U.S. use insulin.[ii]

Insulin was initially discovered by researchers at the University of Toronto in 1921. According to a recent article in the New England Journal of Medicine that describes the origins of the medication, “When the [research] team [that discovered the insulin] applied for a U.S. patent in January 1923 (which they later sold to the university for $1), they stated that their goal was not profit, but ensuring the speedy and safe availability of their discovery to the public.”[iii]

These scientists wanted to be sure that “no one could secure a profitable monopoly” on the production of the drug.[iv]

Today, insulin manufacturers in the U.S. “exercise monopoly power over pricing,” in the words of Dr. Rena Conti, Ph.D., a Harvard-trained health economist and Assistant Professor in the Departments of Pediatrics & Public Health Sciences (Health Services Research) at the University of Chicago.[v]

The cost of insulin per patient rose 387% between 2006 and 2013 in the U.S., climbing from $190 per year to $736 per year.[vi]

Eli Lilly, Novo Nordisk and Sanofi dominate the global insulin market in terms of revenue.[vii]

Alex Azar, Eli Lilly and Insulin Prices

During Azar’s tenure at Lilly USA, LLC, and into this year, Eli Lilly and Company has faced public and political scrutiny – and the attention of law enforcement agencies in the U.S. and abroad – for the pricing of its insulin products.[viii]

The list price for a vial of Lilly’s top-selling product, the inuslin Humalog, increased 1,214%, from $21 to $255 between 1996 and 2016.[ix]

On November 3, 2016, Senator Bernie Sanders and Congressman Elijah Cummings wrote Attorney General Loretta Lynch and Federal Trade Commission Chairwoman Edith Ramirez

“…to ask the Department of Justice and the Federal Trade Commission to investigate whether pharmaceutical companies manufacturing insulin products have colluded or engaged in anticompetitive behavior in setting their drug prices.”[x]

The letter names Eli Lilly repeatedly, and notes that in 2010, Mexico’s antitrust enforcement agency fined Eli Lilly in Mexico for colluding with other insulin manufacturers in a scheme that involved “eliminating competition and ensuring artificially high prices.”[xi]

Class action complaint

In February 2017, a class action complaint was filed in federal district court on behalf of eleven named diabetic patients and similarly situated patients.

The Amended Complaint filed in March 2017 alleges Eli Lilly, Novo Nordisk and Sanofi have unlawfully conspired to raise the price of insulin products in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) and various state consumer protection and antitrust statutes.[xii]

The suit alleges Eli Lilly and the other companies broke the law by

“…engaging in a scheme and enterprise whose purpose is to unlawfully inflate the benchmark prices of rapid- and long- acting analog insulin drugs to provide large pharmacy benefit managers (PBMs) with wider spreads between the benchmark prices and real prices.”[xiii]

The Amended Complaint states, “This scheme directly and foreseeably causes consumers to overpay for these life-saving medications.”[xiv]

In September 2017, the Honorable Judge Brian R. Martinotti of the U.S. District Court of New Jersey consolidated this case – together with two additional antitrust cases naming Lilly, Novo, Sanofi and multiple PBMs as defendants – into what Kaiser Health News called last week “one behemoth potential class-action suit.”[xv]

Throughout the past 18 months, a trickle of information has emerged in Eli Lilly’s filings with the Securities and Exchange Commission (SEC) that reveals ongoing law enforcement investigations into the company’s insulin product pricing.[xvi]

Eli Lilly’s second quarter filing with the SEC in 2016 disclosed that the company had “received a civil investigative demand from the U.S. Attorney’s Office for the Southern District of New York requesting documents and information relating to our contracts with, services performed by and payments to pharmacy benefit managers.”[xvii]

In its first quarter filing with the SEC in 2017, Eli Lilly divulged that it had “received a civil investigative demand from the State of Washington’s Office of the Attorney General relating to the pricing of our insulin products and our relationships with pharmacy benefit managers.”[xviii]

In that same filing, Eli Lilly said it also had “received a civil investigative demand from the State of New Mexico’s Office of the Attorney General relating to the pricing of our insulin products.”[xix]

Two months later, in its second quarter filing with the SEC, Eli Lilly revealed the company had “received a civil investigative demand from the State of Minnesota’s Office of the Attorney General relating to the pricing and sale of our insulin products.”[xx]

The filing additionally states: “The Offices of Attorneys General in California and Florida have requested information relating to the pricing of our insulin products.” [xxi]


[i] See, e.g., “Insulin Basics,” and “Insulin Pumps,” American Diabetes Association, http://www.diabetes.org/living-with-diabetes/treatment-and-care/medication/insulin/insulin-basics.html.
[ii] Miriam E Tucker, “Why Are There No Generic Insulins?,” Medscape Medical News, March 18, 2015, http://www.medscape.com/viewarticle/841669.
[iii] Jeremy A. Green, M.D., Ph.D., and Kevin R. Riggs, M.D., M.P.H, “Why Is There No Generic Insulin? Historical Origins of a Modern Problem,” New England Journal of Medicine, 2015; 372: 1171.
[iv] Ibid.
[v] Rebecca Robins, “The insulin market is heading for a shakeup. But patients may not benefit,” Stat News, October 14, 2016, https://www.statnews.com/2016/10/14/insulin-prices-generics/.
[vi] UNITE HERE correspondence with Xinyang Hua, MSc., Natalie Carvalho, Ph.D., and Michelle Tew, MPH, authors of “Expenditures and Prices of Antihyperglycemic Medications in the United States: 2002-2013,” Journal of the American Medical Association, 2016; 315 (13): 1400-1402, http://jamanetwork.com/journals/jama/article-abstract/2510902.
[vii] Lisa S. Rotensetein, Nina Ran, Joseph P. Shivers, Mark Yarchoan and Kelly L. Close, “Opportunities and Challenges for Biosimilars: What’s on the Horizon in the Global Insulin Market?,” p 138, Clinical Diabetes 2012 Oct; 30(4): 138-150, http://clinical.diabetesjournals.org/content/30/4/138.
[viii] For an overview of insulin pricing litigation and law enforcement investigations in the U.S. over the course of the last 18 months, from which much of the next section is drawn, see Sarah Jane Tribble, “Timeline: Insulin Market Under Scrutiny,” Kaiser Health News, October 30, 2017, https://khn.org/news/timeline-insulin-market-under-scrutiny/.
[ix] Carolyn Y. Johnson, “After years of price hikes, Eli Lilly announces a discount on insulin,” Washington Post, December 13, 2016, https://www.washingtonpost.com/news/wonk/wp/2016/12/13/after-years-of-price-hikes-eli-lilly-announces-a-discount-on-insulin/?utm_term=.5680edda129c.
[x] Senator Bernard Sanders and Representative Elijah Cummings, Letter to Attorney General Loretta Lynch and Federal Trade Commission Chairwoman Edith Ramirez, November 3, 2016, https://www.sanders.senate.gov/download/sanders-cummings-letter-to-doj-ftc-on-insulin?inline=file.
[xi] Noel Randewich, “Mexico fines Eli Lilly, others for collusion,” Reuters, February 23, 2010, https://www.reuters.com/article/mexico-pharmaceutical/mexico-fines-eli-lilly-others-for-collusion-idUSN2310744920100223.
[xii] Chaires et al. v. Novo Nordisk et al., Case No.  3:17-CV-00699, Dkt. 1, (D.N.J. January 30, 2017), available at http://courthousenews.com/wp-content/uploads/2017/02/NovoNJ.pdf.
[xiii] Chaires et al. v. Novo Nordisk et al., Case No. 3:17-cv-00699-BRM-LHG, Dkt. 18, ¶ 4 (D.N.J. March 17, 2017), available at https://www.hbsslaw.com/cases/insulin-overpricing
[xiv] Ibid.
[xv] Sarah Jane Tribble, “Timeline: Insulin Market Under Scrutiny,” Kaiser Health News, October 30, 2017, https://khn.org/news/timeline-insulin-market-under-scrutiny/.
[xvi] For a recent overview of U.S. law enforcement and regulatory activities regarding the insulin pricing of Eli Lilly, Novo Nordisk and Sanofi, see Sarah Jane Tribble, “Timeline: Insulin Market Under Scrutiny,” Kaiser Health News, October 30, 2017, https://khn.org/news/timeline-insulin-market-under-scrutiny/.
[xvii] Eli Lilly and Company, 2016 10-Q (2nd Quarter), filed July 27, 2016, page 45, https://www.sec.gov/Archives/edgar/data/59478/000005947816000399/lly-6302016x10q.htm.
[xviii] Eli Lilly and Company, 2017 10-Q (1st Quarter), filed May 1, 2017, page 43, https://www.sec.gov/Archives/edgar/data/59478/000005947817000129/lly-3312017x10q.htm
[xix] Ibid.
[xx] Eli Lilly and Company, 2017 10-Q (2nd Quarter), filed July 28, 2017, page 49, https://www.sec.gov/Archives/edgar/data/59478/000005947817000183/lly-6302017x10q.htm.
[xxi] Ibid.