The financial burden of diabetes treatment has rapidly escalated over the past two decades, with insulin prices skyrocketing by over 1,000% since the early 2000s. According to Vincent Rajkumar in The High Cost of Insulin in the United States: An Urgent Call to Action (2020), the price of brand-name insulin treatment averaged $21 in 1999. The unbridled price growth has been attributed to a web of agreements between drug manufacturers and PBMs, which incentivize higher list prices rather than affordability for consumers (Celine Castronuovo, State Health Trend Reporter at Bloomberg Law published an article on December 19, 2023, Insulin, PBM Lawsuits Seen as Alternative to Pricing Legislation).
On September 20, 2024, the Federal Trade Commission announced that it filed a lawsuit against prescription drug “middlemen” alleging that the Pharmacy Benefit Managers’ (PBM) rebate-seeking strategy has led to skyrocketing list prices of insulin medications. The complaint highlighted that while PBM respondents garnered billions in rebates and associated fees, one out of every four insulin patients was not able to afford their medications by 2019—an effect attributed to the increase of over 1,200% in the list price of Humalog, which soared to $274.
These growing costs have had dire, life-threatening implications for individuals with diabetes who rely on these life-saving medications. Consumers are consequently forced to deal with the adverse and burdensome side effects, including rationing, which, according to Right Care Alliance (2024), has been linked to the fatal condition of diabetic ketoacidosis and has forced individuals to make the difficult choice between seeking a proper medical treatment or fulfilling vital living expenses—a choice that should not have to be made in this modern day and age.
The soaring costs of insulin have sparked a wave of legal actions across the United States, with litigation attempting to address the price-gouging practices of insulin suppliers. In Virginia, the consistent increase in insulin medication prices has compelled various local governments to pursue legal action against major insulin manufacturers and pharmacy benefit managers, or PBMs, including Eli Lilly, Novo Nordisk, and Sanofi.
Several lawsuits have been filed by the different states and cities of Virginia against such manufacturers and PBMs. Fairfax City law firm, Chap Petersen & Associates represents many Virginia localities including Accomack County and the City of Portsmouth, the City of Charlottesville, Henry County, the City of Newport News, Northampton County, Orange County, Pittsylvania County, Richmond County, and York County initiated related lawsuits according to the December 9, 2024, edition of The Virginia Attorney.
This systematic manipulation extracts massive, unwarranted profits at the direct expense of taxpayers, as local governments and healthcare systems struggle under the crushing weight of artificially inflated costs. Allegations claim that these “middlemen” have prioritized high-priced insulin medications to maximize rebates instead of reducing costs for consumers. These practices have been highlighted in investigative reports on the insulin pricing scheme that revealed a collaboration between manufacturers and PBMs designed to keep prices inflated (Insulin Pricing Lawsuit – Price Inflation (Updated November 2024)).
When companies conspire to inflate prices, they’re not just manipulating markets – they’re actively undermining the ability of local governments and healthcare systems to serve their communities. The financial burden imposed by these schemes represents a direct transfer of wealth from public coffers to corporate balance sheets, achieved through deliberate deception rather than legitimate market competition. Addressing this challenge requires not only aggressive enforcement but a fundamental rethinking of how we protect essential public services from predatory corporate behavior. Virginians and Americans deserve better.
