Novo Nordisk settles insulin pricing suit for $100M
Novo Nordisk, one of the world’s top three manufacturers of insulin, agreed to pay $100 million to settle a 2017 investor suit that alleged the company failed to disclose that it was under the same pricing pressures as its competitors.
Novo said in a statement on Friday the settlement was reached after a voluntary mediation process and resolves claims brought on by investors for alleged violations of US securities laws. The company said the settlement contains no admission of liability, wrongdoing or responsibility by any of the defendants.
But the settlement further exposes how the middlemen, known as pharmacy benefit managers, have altered the course of insulin pricing as prices have increased for diabetics and manufacturers’ profits have declined.
The investors’ complaint alleged that “Novo Nordisk was able to raise the price of its insulin drugs 450% above the rate of inflation. From 2010-2015, the Company raised the price of its signature diabetes drug (Levemir) by 169%. In 2014-2015 alone the Company increased Levemir’s price by 30%, and increased the price of its NovoLog product by nearly 21%. As Novo Nordisk recently admitted, these price increases were so significant that ‘many patients simply can’t afford the medicine they need.'”
But those price increases were not enough, as the company in Oct. 2016 cut its long-term profit growth forecasts by 50%, specifically citing increased pricing pressures on diabetes drugs.
One month later, Sen. Bernie Sanders (D-VT) and the late Rep. Elijah Cummings (D-MD) sent a letter to the Department of Justice, calling on federal antitrust regulators to probe illegal collusion by Novo Nordisk and the other major insulin producers —Sanofi, Eli Lilly, and Merck — to set the prices for insulin and other diabetes drugs.
The investors noted in their complaint that in 13 instances since 2009, the prices of Novo’s Levemir and Sanofi’s Lantus have increased in tandem in the US.
Novo Nordisk pledged on Nov. 30, 2016, to limit all future drug list price increases to single-digit percentages. But in the four years since then, lawmakers are still trying to find a way to nail the companies on collusive price increases.
Six House Democrats in March sent a letter to the FTC, calling for an investigation into the potential collusion of insulin market leaders Eli Lilly, Sanofi and Novo Nordisk.