Corporate Greed vs. Patient Need: The History of the Insulin Price-Fixing Crisis

Insulin has been life-sustaining drug for millions of Americans for over a century. However, despite no change to the cost of production, the price of insulin has skyrocketed more than ten times over, through a deliberate pattern of corporate manipulation. The cost has forced many Americans and their families to choose between bankruptcy and their health, even survival itself. After public outcry and many preventable deaths, the pharmaceutical industry now is finally facing consequences for one of the most egregious public health crises in modern American history.

FOUNDATION OF A CRISIS: 1996-2006

The insulin pricing scandal has its roots in decisions made in the late 1990s. Three pharmaceutical giants—Eli Lilly, Novo Nordisk, and Sanofi—controlled nearly 90% of the global insulin market. Rather than compete on price, these companies planned a coordinated strategy of price manipulation, monopolizing the market supply of the vital drug.

In 1996, a vial of insulin cost approximately $21. As a result of insulin price fixing, in 2006, that same vial had risen to around $40. During this period, these pharmaceutical companies also began implementing a series of calculated anti-competitive practices designed to remove affordable options as well:

• Product Hopping and Evergreening: 
  • Companies systematically discontinued cheaper, older insulin formulations as drugs were about to lose patent protection. 
  • Introduced “new and improved” versions with minor modifications (ex. changing the delivery mechanism, making slight molecular adjustments) allowing them to extend patent protection while offering minimal clinical benefits.
• Artificial Scarcity Creation: 
  • Manufacturers restricted production of lower-cost insulin versions, creating artificial shortages, forcing patients onto more expensive alternatives.
  • Major manufacturers would flood the market with temporary discounts when generic insulin was available, driving competitors out of business before returning to inflated pricing.
• Pay-for-Delay Agreements: 
  • Manufacturers entered into agreements with potential generic competitors, paying them to delay bringing cheaper alternatives to market.

THE ACCELERATION: 2007-2015

The financial crisis of 2008 might have devastated many industries, but it provided cover for insulin manufacturers to accelerate their pricing schemes. As Americans struggled with unemployment and foreclosures, diabetic patients faced an additional crisis: their life-sustaining medication was becoming unaffordable.

Over seven years, the cost of insulin was deliberately tripled in a coordinated effort from Eli Lilly, Novo Nordisk, and Sanofi. Insulin prices jumped from $40 per vial in 2006 to over $120 in 2015. However, internal corporate documents have since revealed an extensive web of anti-competitive practices far beyond simple price coordination:

• Shadow Pricing and Market Manipulation: 
  • “Shadow pricing” strategy was used, where each manufacturer would mirror the price increases of competitors. 
  • Internal emails showed executives explicitly monitoring competitors’ pricing and coordinating increases so company would NOT “break ranks” by offering lower prices.
• Rebate Manipulation Schemes: 
  • Complex rebate structures created with Pharmacy Benefit Managers (PBMs) that incentivized higher list prices for insulin, as this more expensive insulin offered higher manufacturer rebates. 
  • PBMs would pocket these rebates rather than passing savings to patients.
• Insurance Plan Manipulation:
  • Manufacturers worked directly with insurance companies to structure formularies (approved drug lists) that excluded lower-cost alternatives and placed insulin in high-deductible tiers. They provided “rebates” to insurers while maintaining sky-high list prices, ensuring patients bore the full cost until meeting annual deductibles.
• Predatory Patient Assistance Programs: Companies created patient assistance programs that appeared charitable but actually served to maintain high list prices. These programs had restrictive income requirements, complex application processes, and could be terminated without notice, leaving patients vulnerable to sudden price shocks.

The human cost became devastating and widespread during this period:

Death and Medical Emergencies: Emergency rooms across the country began seeing a dramatic increase in diabetic ketoacidosis (DKA) cases—a life-threatening condition that occurs when patients can’t afford their insulin. Hospital data showed that insulin-related DKA admissions increased by over 40% between 2009 and 2015, with many cases directly attributed to patients rationing or skipping doses due to cost.

Rationing and Dangerous Self-Management: Studies revealed that over 25% of diabetic patients were rationing their insulin by 2015. Patients adopted dangerous practices including:

• Taking partial doses to make supplies last longer
• Reusing needles and syringes far beyond safe limits
• Switching between different insulin types based on cost rather than medical need
• Going days without insulin during financial hardships
• Using expired insulin purchased from unregulated sources

Financial Devastation: Families filed for bankruptcy at alarming rates due to insulin costs. A 2016 study found that households with a diabetic family member were 60% more likely to experience financial hardship, with many forced to choose between insulin and basic necessities like housing, food, and transportation.

Mental Health Crisis: The constant stress of affording life-sustaining medication led to widespread anxiety, depression, and PTSD among diabetic patients and their families. Suicide rates among diabetics increased significantly, with many citing the hopelessness of managing both their disease and its financial burden.

THE BREAKING POINT: 2016-2019

By 2016, the insulin pricing crisis had reached a breaking point that shocked even healthcare advocates. Insulin prices had increased by over 1,200% since 1996, while the cost of production remained virtually unchanged. A month’s supply of insulin that should have cost $40 was now priced at $300 or more.

The most tragic consequences of this corporate greed became undeniable symbols of a broken system:

Preventable Deaths: Press and researchers have documented hundreds of preventable deaths directly linked to insulin rationing. These included:

• Alex Smith, 26, died in 2018 after not being able to afford his monthly insulin.
• Josh Wilkerson, 27, who died in 2019 after rationing insulin due to insurance gaps
• Jada Louis, 24, who died in 2020 after her insulin prescription ran out and could not afford refills.
• Countless others whose deaths were attributed to “diabetic complications”, but were actually caused by inability to afford sufficient medication.

Systematic Health Deterioration: Long-term studies revealed catastrophic health outcomes among patients forced to ration insulin:

• 300% increase in diabetic complications including blindness, kidney failure, and amputations
• Dramatically reduced life expectancy, with some patients losing 10-15 years of life due to poor diabetes management forced by cost
• Increased rates of heart disease, stroke, and other diabetes-related conditions

Economic Ripple Effects: The insulin crisis created cascading economic damage:

• Emergency room visits for preventable diabetic complications cost the healthcare system over $3 billion annually by 2018
• Workplace productivity losses due to diabetic employees managing health crises
• Increased disability claims as patients suffered preventable complications
• Strain on social services as families faced bankruptcy and homelessness

Destruction of Doctor-Patient Relationships: Healthcare providers were forced into impossible positions, watching patients deteriorate because they couldn’t afford prescribed treatments. Many physicians reported leaving endocrinology practices due to the psychological toll of being unable to help their patients access life-saving medication.

During this period, the pharmaceutical companies escalated their anti-competitive practices to unprecedented levels:

Supply Chain Weaponization: Companies began using their control over the entire insulin supply chain as a weapon against patients and competitors. They:

• Acquired insulin distribution networks to control every step from manufacturing to pharmacy delivery
• Implemented exclusive dealing arrangements that prevented pharmacies from offering competing products
• Created artificial bottlenecks in production to justify price increases and supply shortages

Data Manipulation and False Advertising: Internal documents revealed systematic deception about insulin costs and effectiveness:

• Companies funded misleading studies that overstated the benefits of newer, more expensive formulations
• They suppressed research showing that older, cheaper insulin was equally effective for most patients
• Marketing materials deliberately confused patients and doctors about the necessity of expensive insulin variants

Regulatory Capture Attempts: The companies engaged in extensive lobbying and regulatory manipulation:

• Spent over $100 million annually on lobbying efforts to prevent price regulation
• Placed former company executives in key FDA positions to influence approval processes
• Created fake patient advocacy groups that opposed generic insulin development while appearing to represent patient interests

Insurance companies, meanwhile, structured their plans to place insulin in high-deductible tiers, meaning patients bore the full cost until meeting their annual deductibles. Some patients faced insulin costs of $500-800 per month, despite having “good” insurance coverage.

LEGAL REFORM: 2020-Present

Public outrage finally reached a tipping point around 2019, leading to congressional hearings, state investigations, and a wave of lawsuits. The three major insulin manufacturers were forced to testify before Congress, where they struggled to justify price increases that far exceeded any reasonable measure of inflation or research costs.

Multi-district litigation (MDL) was filed against Eli Lilly, Novo Nordisk, and Sanofi, alleging price-fixing conspiracy and antitrust violations. These lawsuits revealed damning internal communications showing coordination between competitors and deliberate strategies to maximize revenue at patients’ expense.

In response to mounting pressure, some manufacturers began offering limited patient assistance programs and lower-cost versions of their insulin products. However, these programs often came with restrictive eligibility requirements and didn’t address the fundamental problem of artificially inflated list prices.

State governments began taking action as well. Several states passed legislation capping insulin co-pays at $25-50 per month for insured patients. While helpful, these caps often shifted costs to insurance companies rather than addressing the root cause of inflated pricing.

The Ongoing Impact and Path Forward

Today, despite some reforms, insulin remains unaffordable for many Americans. The damage from two decades of price manipulation continues to affect families across the country. Patients still ration their medication, still choose between insulin and other necessities, and still face financial ruin due to their medical condition.

The insulin pricing scandal represents more than just corporate greed—it’s a fundamental breach of the social contract between pharmaceutical companies and the patients they serve. When companies hold life-sustaining medications hostage for profit, they cross a line from business into extortion.

Your Rights as a Patient

If you or a loved one has been harmed by insulin price gouging, you may have legal options. The pattern of coordinated price increases, market manipulation, and deliberate restriction of affordable alternatives may constitute violations of antitrust law, consumer protection statutes, and other legal protections.

Taking Legal Action: Your Rights and Options

If you or a loved one has suffered harm due to insulin price gouging, you have several potential legal avenues for seeking justice and compensation. The extensive documentation of corporate misconduct provides strong foundations for various types of legal claims.

Immediate Steps to Take

Document Your Damages: Begin collecting evidence of how insulin pricing has affected you:

• Keep all receipts for insulin purchases, including pharmacy records showing price increases over time
• Maintain medical records documenting health complications resulting from rationing or inability to afford medication
• Document financial hardships including bankruptcy filings, loan applications, or debt collection notices related to insulin costs
• Save correspondence with insurance companies, PBMs, or pharmaceutical companies regarding coverage denials or payment issues
• Keep records of any emergency room visits or hospitalizations related to insulin rationing

Preserve Communication Records: Save any communications that show:

• Pharmacy notifications of price increases
• Insurance company explanations of coverage changes
• Patient assistance program correspondence
• Medical provider communications, prescriptions, notes and/or recommendations 

Multi-District Litigation (MDL) Lawsuits: 

In late 2023, lawsuits against insulin manufacturers and PBMs consolidated into a multi-district litigation (MDL) in the United States District Court of New Jersey (Case 2:23-md-03080-BRM-RLS. This is a federal case, so any group or individual in the United States with a qualifying claim may join the lawsuit.

Who Can Join?

The burden of exploitative insulin pricing falls heavily on self-funded healthcare plans and their members/patients, including self-funded U.S. government entities and unions at the state, county, and city levels. These groups and the individuals in them have a unique opportunity to hold insulin manufacturers and PBMs accountable by joining the litigation.

You may qualify if you:

• Are a diabetic patient (or are an insurer of one) who has paid for insulin out-of-pocket or through insurance;
• Are part of a self-funded health plan that has incurred increased costs due to high insulin prices; or
• Represent a health plan or organization whose inflated prices have been financially impacted

The state of insulin, as well as other prescription pricing is undergoing significant changes due to these legal challenges and regulatory interventions. If you represent an affected entity or want to learn more about filing a claim, reach out to our team here at the Herd Law Firm, PLLC at 713-955-3699 or charles.herd@herdlawfirm.com for more information about filing a claim!

Taking Action Today

Time is critical. Statutes of limitations may limit your ability to seek compensation, and evidence preservation is essential for building the strongest possible case.

We the Herd Law Firm, PLLC, we support every man, woman, and child exposed to contaminants, and believe you deserve quality, attentive legal representation. We are proud to be able to aid our veterans, their families, and others exposed to toxins in seeking restitution for their injuries.

8/5/25

Image Source: Eli Lilly Co., Novo Nordisk, Santofi Pharmaceuticals