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EBDM 2019: Regulatory Updates

Evidence-Based Diabetes ManagementMarch 2019
Volume 25
Issue 4

Judge Dismisses RICO Claims, but 3 Insulin Makers Still Face Drug Pricing Lawsuit

A US District Judge in New Jersey has allowed a proposed class-action lawsuit against 3 major insulin makers to proceed.

The suit, Chaires v Novo Nordisk Inc, was originally brought by a group of individuals who filed a 2017 complaint1 against Novo Nordisk, Eli Lilly, and Sanofi. It was filed on behalf of the individuals themselves and a proposed class of insulin users who had paid for any part of the purchase price of several brand-name insulins.

The decision came after the Type 1 Diabetes Defense Foundation voluntarily dismissed Boss v CVS Health and related claims over its objection to an agreement entered into among law firms but not disclosed to an original plaintiff, Julia Boss.2 The tolling agreement, discussed at length in the March 2018 issue of Evidence-Based Diabetes Management™, prevents prosecution of pharmacy benefit managers (PBMs) until a later date.3

The original complaint alleged that rising insulin prices are unrelated to rises in production costs and that “Sanofi, Novo Nordisk, and Eli Lilly have not only dramatically increased their insulins’ benchmark prices in the last 10 years, they have done so in perfect lockstep.”

According to the plaintiffs, in order to secure positions on PBMs formularies, the drug companies artificially inflated list prices, providing higher rebates to PBMs and forcing patients (especially those who are uninsured, have high deductibles, have high coinsurance rates, or are in the Medicare Part D coverage gap) to pay more out of pocket.

“In an industry where artificial benchmark price inflation has become common, Sanofi, Novo Nordisk, and Eli Lilly are [3] of the worst offenders,” read the complaint.

The plaintiffs also alleged that the drug makers violated the Racketeer Influenced and Corrupt Organizations Act (RICO). Novo Nordisk and Sanofi asked the court to dismiss the RICO claims, saying that the plaintiffs’ claims were barred by the “indirect purchaser rule,” a doctrine that states that a party cannot show that it was harmed by providing evidence only of purchases made indirectly.

The drug makers argued that the plaintiffs could not claim to have purchased their insulin directly from the companies because the products were sold to the patients by retailers (who in turn obtained the insulin from other members of the supply chain) and that the companies’ actions did not amount to a conspiracy under RICO.

In an opinion4 filed on February 15, 2019, Judge Brian R. Martinotti agreed with the insulin makers’ argument and dismissed the RICO claims.

However, he denied the defendants’ request to dismiss the suit for not having demonstrated a measurable loss to the plaintiffs, allowing the case to proceed.

The judge wrote in his opinion that the plaintiffs adequately pleaded a measurable loss in their contention that they were unfairly made to pay more than their share of the net prices of insulin. The court also held that the plaintiffs adequately alleged “fraudulent, unfair, or unconscionable conduct” on the part of the drug makers.

Attorney Steve Berman, JD, of Hagens Berman Sobol Shapiro LLP, co—lead counsel for the plaintiffs, said in a statement that Martinotti’s decision “clears the way for us to begin obtaining discovery from the manufacturers and PBMs so we can shine the light on exactly what has driven insulin prices sky-high.”5


  1. Chaires v Novo Nordisk, 3:2017cv0069, 2019.
  2. T1DF voluntarily dismisses Boss v. CVS Health, sounds alarm on agreement between PBM defendants and plaintiffs’ counsel [press release]. Eugene, OR: Type 1 Diabetes Defense Foundation; January 4, 2019. t1df.org/news. Accessed February 26, 2019.
  3. Caffrey M. Out of pocket costs for insulin are a problem. litigants disagree who is at fault. Am J Manag Care. 2018;23(SP4):SP120-SP122.
  4. Judge Martinotti opinion. Case No. 3:17-cv-0699-BRM-LHG.
  5. Hagens Berman: Judge denies insulin makers’ motion to dismiss class-action lawsuit regarding skyrocketing insulin prices [press release]. Newark, NJ: Hagens Berman; February 15, 2019. businesswire. com/news/home/20190215005526/en/Hagens-Berman-Judge-Denies-Insulin-Makers’-Motion. Accessed February 16, 2019.

FDA Clears Phone App for d-Nav Insulin Guidance Service

Hygieia, a digital insulin management company, announced in late February 2019 that the FDA had given clearance to a phone app that works with its d-Nav insulin guidance service, designed to help people with type 2 diabetes (T2D) achieve optimal insulin doses to better control blood glucose.

The company claims in a statement1 that the app is “the first insulin-management phone app able to titrate individualized doses for all types of insulin regimens, delivering recommendations directly to the patient.” Among its capabilities, it can connect to any glucose meter that shares data for the cloud, and it is available for both iOS and Android mobile phones.

The company, with headquarters in Livonia, Michigan, and Dundonald, Northern Ireland, aids patients by titrating individualized doses of insulin, which typically allows patients to use less insulin once they achieve glycemic control. The company’s website features a scenario of a patient who was using 90 units per day when he started with d-Nav and gradually increased insulin use during the first 2 months to 109 units, but then his insulin needs declined to 76 units by month 6. The website states2 that without the d-Nav support system, such a patient could not achieve these results without frequent office visits for insulin dose adjustments.

The system relies on cloud-based technology backed by a team of healthcare professionals, according to the statement. Proprietary algorithms use patients’ glucose readings to offer personalized adjustments and make dosing recommendations. The system generated improved patient outcomes and cost savings over a 6-year period in Northern Ireland and it has been adopted by Blue Cross Blue Shield of Michigan (BCBSM). According to the company, at-risk patients with T2D enrolled in commercial BCBSM plans in southeast Michigan have access to the service.

Apps to assist patients with insulin dosing have existed for some time; the first product to offer personalized recommendations based on individual data was Welldoc’s BlueStar app,3 approved in 2013. For years, the FDA was reluctant to approve devices that did the dosing for patients, but that changed with the breakthrough decision to add a dosing indication to the Dexcom G5 continuous glucose monitor, which recognized how many people with diabetes were already using the technology.

Many more apps and insulin delivery devices4 that perform individualized dosing are reaching the market, leading some to believe that the traditional insulin pump may become obsolete.


  1. Hygieia receives 510(k) clearance from FDA for phone app that enhances company’s d-Nav insulin guidance service [press release]. Livonia, MI: Hygieia; February 20, 2019. hygieia.com/hygieia-receives- 510k-clearance-from-fda-for-phone-app-that-enhances-companys-d-nav-insulin-guidance-service/. Accessed February 21, 2019.
  2. The d-Nav way. Hygieia website. hygieia.com/clinical/the-d-nav-way/. Accessed February 20, 2019.
  3. Caffrey M. Welldoc touts what clinical outcomes, engagement mean to employers. The American Journal of Managed Care® website. ajmc.com/journals/evidence-based-diabetes-management/2018/ september-2018/welldoc-touts-what-clinical-outcomes-engagement-mean-to-employers-bottom-line. Published September 28, 2018. Accessed February 20, 2019.
  4. Smith A. After 20 years of watching diabetes tech, Kliff eyes smart insulin pens, CGM for patients with type 2 diabetes. The American Journal of Managed Care® website. ajmc.com/journals/evidence-based-diabetes-management/2017/september-2017/after-20-years-of-watching-diabetes-tech-kliff-eyes-smart-insulin-pens-cgm-for-patients-with-type-2-diabetes. Published September 22, 2018. Accessed February 20, 2019.

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