Drug companies have come under fire for exorbitant increase in their drug prices. A lawsuit, filed on Monday in a federal court in Massachusetts, has named Sanofi SA ($SNY), Novo Nordisk ($NVO) and Eli Lilly and Co ($LLY). The case pertains to price fixing as it claimed that the companies have simultaneously hiked the price of insulin by over 150 percent during the past five years.
The plaintiffs have claimed that these three companies raised their public benchmark price for insulin products but maintained a lower "true" price. This is the price they charge large pharmacy benefit managers such as CVS Health. The lawsuit alleges that pharmacy benefit managers act as intermediaries with health insurers and keep a percentage of the price difference.
Sanofi has said that It will fight the case. in a statement, the company said, “We strongly believe these allegations have no merit, and will defend against these claims.” Other two defendants have also issued similar statements.
New Trump administration had previously alluded that it will crack down on rampant increases in drug prices. Many companies have now explicitly stated to keep the price escalations at reasonable levels.
Sanofi stock price has lost over 1 percent on its value so far this year while it lost nearly 4 percent value in the past 12 months.