Sanders, Cummings Request Investigation of Insulin Prices for Collusion

November 4, 2016

Prices rising for the same drug across multiple pharmaceutical companies might be the result of collusion, according to a letter sent to the Department of Justice and the Federal Trade Commission from Senator Bernie Sanders, I-Vermont, and Representative Elijah Cummings, D-Maryland.

Prices rising for the same drug across multiple pharmaceutical companies might be the result of collusion, according to a letter sent to the Department of Justice (DOJ) and the Federal Trade Commission (FTC) from Senator Bernie Sanders, I-Vermont, and Representative Elijah Cummings, D-Maryland.

The expectation when a patent expires is that the drug price will drop as competition enters the market. However, prices of 3 different insulin products created by 3 different drug makers have risen steadily. Sometimes the price increases mirror one another, Sanders and Cummings wrote in a letter addressed to Attorney General Loretta E. Lynch and FTC Chair Edith Ramirez.

In the letter, they ask Lynch and Ramirez to investigate whether these companies are engaging in collusion, which is illegal, or otherwise anticompetitive behaviors.

“This is an issue of tremendous national significance,” Sanders and Cummings wrote, adding that the United States spent $322 billion in medical costs and reduced productivity because of diabetes and prediabetes in 2012. Nearly 30 million Americans have diabetes and the CDC has estimated that 86 million have prediabetes, which means they are at risk of progressing to type 2 diabetes.

Insulin products aren’t the only ones being scrutinized. The DOJ is already investigation more than a dozen companies to see if executives came to an agreement on price increases for approximately 2 dozen drugs, including a heart treatment and an antibiotic, reported Bloomberg. The first of the charges could be filed by the end of 2016.

The diabetes medications that Sanders and Cummings are drawing attention to are 2 insulins, Lantus from Sanofi and Humalog from Eli Lilly, as well as a top-selling dipeptidyl peptidase-4 (DPP-4) inhibitor Januvia, and its metformin combination, Janumet from Merck & Co. From 2002 to 2013, the price of insulin medications more than tripled.

“The market entry price of ‘follow-on’ insulin products, which largely duplicate existing drugs, are partially informed by the high prices of available therapies,” they wrote. “Patients and taxpayers may not realize the savings that could be gained if existing insulin products were less expensive.”

In addition to the financial savings for taxpayers, the high price of insulins mean many patients find their treatment increasingly unaffordable.

“We are concerned that the potential coordination by these drug makers may not simply be a case of ‘shadow pricing,’ but may indicate possible collusion, and we believe this egregious behavior warrants a thorough investigation,” Sanders and Cummings concluded in their letter.