Understanding litigation against drug, medical device manufacturers

Drug Litigation 

Several states and cities have taken legal action to address the insulin affordability crisis. State officials in Utah and Arizona and municipalities in New York, Virginia, Maryland, Illinois, and Ohio have filed lawsuits against insulin manufacturers and pharmacy benefit managers (PBMs). These legal actions seek to hold the companies accountable for their alleged role in driving up insulin prices.  

Insulin Pricing 

"Unfortunately, when it comes to insulin, the major manufacturers and PBMs have colluded in terms of increasing the price and accessibility of these drugs for millions of Americans," Portal explained. 

These practices have resulted in patients resorting to alternative measures, such as purchasing insulin from other countries and rationing dosages.  

For example, as many as 1 in 4 insulin users have reported skipping doses or taking less than they need, putting themselves at risk for serious and even deadly complications. Insulin  

In the United States, approximately 8.4 million people with diabetes rely on insulin. Meanwhile, insulin prices in the US are tenfold higher than in other nations. 

Despite these substantial price increases, Portal highlighted the lack of significant insulin research and development advancements and mentioned how corporate greed has raised insulin prices by 350–400%.  

Pricing Caps 

Three corporations dominate approximately 90% of the insulin market in the US: American pharmaceutical company Eli Lilly, French pharmaceutical company Sanofi, and Danish drugmaker Novo Nordisk. 

"For the first time, these insulin manufacturers have announced a cap on price increases, dramatically reducing the price of insulin," Portal mentioned.  

For instance, on March 1, 2023, Eli Lilly announced price reductions of 70% for its most commonly prescribed insulins and an expansion of its Insulin Value Program that caps patient out-of-pocket costs at $35 or less per month. 

Echoing this strategy, Novo Nordisk revealed its plans to cut prices of its insulin pens and vials by up to 75%. 

In addition, the Inflation Reduction Act (IRA) caps impose a limit on out-of-pocket expenses for insulin, setting it at $35 per month's supply for each insulin product covered by a Medicare Part D plan. Similar restrictions apply to out-of-pocket costs for insulin provided under Part B. The act also lowers out-of-pocket expenditures for other Medicare medications through additional means. 

These caps on price increases are expected to benefit patients and contribute to more accessible healthcare, reassured Portal. 

The Role of Third-Party Payers 

As a representative of third-party payers, Portal discussed their involvement in litigation against pharmaceutical and medical device manufacturers. He explained that third-party payers, including Medicare Advantage organizations and managed care organizations, have been improperly charged for drugs and devices.  

"There hasn't been significant oversight until the past three or four years, during which congressional investigations and subpoenas were directed at insulin manufacturers," Portal explained, emphasizing the need for greater oversight, investigations, and regulatory frameworks. 

Medical Device Litigation 

Regarding the recall of approximately 3.5 million sleep apnea devices, Portal elaborated on how Philips Respironics, a leading manufacturer of continuous positive airway pressure (CPAP) and bilevel positive airway pressure (BiPAP) devices, was prompted to act due to the degradation of sound abatement foam within the devices, which posed health risks to users.  

Portal also highlighted the collaborative efforts of third-party payers, consumers, and the FDA in pushing for the recall.  

"On the third-party payer side, [MSP Recovery Law Firm] was instrumental in pushing this case. Philips, to its credit, decided to do a massive settlement to reimburse American consumers and third-party payers,” revealed Portal. 

As per the CPAP consumer class action settlement terms, Philips has committed to a minimum payment of $479 million. This sum will be allocated to individuals who purchased the impacted breathing machines and insurance companies that reimbursed users for these devices. 

When asked about key considerations in these settlement negotiations, Portal emphasized the complexity of balancing the interests of all parties involved, acknowledging the challenging nature of achieving fair and equitable outcomes. 

The Role of Litigation in Regulating the Industry 

Portal highlighted the role of litigation in regulating the pharmaceutical and medical device industry by emphasizing that litigation often serves as a mechanism to pressure the industry into changing its conduct and ensuring better access to healthcare.  

"Sometimes, when the government or private industry fails to regulate itself, litigation becomes necessary to police the industry. Over time, these pressure points serve as catalysts to change the dialogue and conduct," said Portal. 

When asked about the future of medical device and pharmaceutical drug litigation, Portal predicted a rise in litigation cases and hopes for increased oversight from government bodies and state attorney generals. He also remained optimistic that litigation would drive positive transformations within the industry. 

“Our goal, and the aspiration of our clients, is to attain improved and affordable healthcare access, ensuring fair pricing for medications without overpayment," he expressed. 

As legal oversight increases, the industry is likely to witness a transformative shift, ultimately leading to improved accessibility and affordability of healthcare for all.