Nationwide Insulin Pricing Settlement by Eli Lilly Called Off

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The proposed settlement between Eli Lilly (LLY.N) and purchasers of its insulin drugs, which aimed to cap prices and provide $13.5 million in resolution for claims of inflated drug costs, has collapsed following an unfavorable ruling from the overseeing judge. Lawyers representing a proposed nationwide class of individuals who paid for Lilly’s insulin drugs announced in a filing in Newark, New Jersey, federal court that they and Lilly had decided not to pursue approval for the deal, initially proposed in May last year.

The decision to abandon the settlement came after U.S. District Judge Brian Martinotti in February declined to certify a class in the litigation, which also involves insulin drug makers Novo Nordisk and Sanofi. Despite efforts by the plaintiffs to proceed as a class action, the judge found that classwide issues did not outweigh individual ones, prompting the lawyers to see no path forward for securing approval for the settlement class.

The collapse of the settlement, which would have limited patients’ out-of-pocket insulin costs to $35 per month for four years, is viewed as a significant setback for consumers by attorney Steve Berman. However, Lilly maintained that the plaintiffs’ claims lacked merit and reiterated its commitment to defending itself against the allegations.

While the proposed settlement has faltered, Lilly and other companies still face lawsuits from states, with some states objecting to the settlement with purchasers because it could impede their legal actions. In February, Lilly settled with Minnesota, agreeing to a price cap and insulin donations to clinics in the state.

Plaintiffs in the cases allege that insulin drug makers artificially inflate list prices for their products while offering rebates to pharmacy benefit managers (PBMs) in exchange for coverage on behalf of health plans. Insulin is essential for patients with type 1 diabetes and some with type 2 diabetes to manage blood sugar levels.

Despite Lilly’s announcement last March to reduce insulin prices and offer them to many patients for $25 or $35, concerns over high costs persist. A survey released by U.S. Senator Elizabeth Warren last July revealed that many patients were still being charged hundreds of dollars for treatments. According to the American Diabetes Association, approximately 8.4 million of the 37 million people in the United States with diabetes use insulin.