$13.5 Million Eli Lilly Settlement Includes Four-Year Cap on Insulin Prices [UPDATE]

Eli Lilly & Co. has agreed to pay $13.5 million and cap the price of insulin for four years to settle long-running class action litigation that alleged the pharma company illegally colluded to drive up the price of the life-saving diabetes medication for uninsured and underinsured consumers.

The proposed settlement, which now awaits preliminary approval from the court, includes $13.5 million in cash payments for certain insulin buyers and “forward-looking consideration” in the form of Eli Lilly keeping in place its $35 cap on the out-of-pocket cost for insulin products, including Humalog, Humulin and Basaglar, for at least four years.

The plaintiffs’ attorneys told the court that the settlement offers “meaningful patient-focused benefits to diabetes patients,” stressing that experts have estimated the four-year insulin price cap to be worth more than $500 million.

Read on to learn more about the insulin settlement, including who can get compensation, which insulin products are covered, how to claim your settlement benefits and more.

Who’s covered by the settlement?

The settlement essentially aims to cover certain individuals who paid for at least part of the price of an Eli Lilly insulin product out of pocket.

More specifically, the deal looks to cover all individuals in the United States who, between January 1, 2009 and the date the deal receives final approval from the court, paid any portion of the purchase price for any Eli Lilly insulin product (listed below) at a price calculated by reference to a list price, average wholesale price or wholesale acquisition cost or price for any purpose other than resale, no matter how the consumer paid for the insulin product.

According to court documents, prices are calculated in this way (i.e., with reference to a list price, average wholesale price or wholesale acquisition cost) if the prescription:

Settlement documents emphasize that if a consumer bought an Eli Lilly insulin product on at least one occasion that fits one of the above-mentioned criteria, they are a class member, even if on another occasion they bought insulin not calculated at a price tallied with reference to a list price, average wholesale price and/or wholesale acquisition cost or price.

If I’m covered by the settlement, will I be notified?

Court documents state that immediately upon preliminary approval of the settlement, the plaintiffs will subpoena the six largest pharmacy benefit managers and seven largest national retail pharmacy chains nationwide to obtain sales and claims data for the purpose of identifying and notifying any potential class members.

Once this process is completed, the settlement administrator will send direct notice of the settlement to potential class members whose email or mailing addresses were included in the transactional data. These efforts will also be supplemented with online advertisements and press releases to attempt to reach affected consumers.

Which insulin products are included in the settlement?

The Eli Lilly insulin products covered by the settlement include Kwikpens, cartridges or vials sold in the U.S. under the brands Humalog, Humulin or Basaglar.

What does the settlement provide?

A pillar of the proposed agreement is Eli Lilly’s assurance that it will leave its price-capping Insulin Value Program in place for four years from the date the deal receives final approval from the court. Under the program, any U.S. resident over 18 and not enrolled in a government health insurance plan can buy their monthly prescription of an Eli Lilly insulin product for no more than $35 out of pocket.

For those who are unable to take part in the program—either because they are not eligible for it or no longer take the company’s insulin products—the deal also calls for Eli Lilly to deposit $13.5 million in cash into a settlement fund from which payments will be made for past insulin purchases. Specifically, in order for a class member to be eligible for a cash payment from the settlement, they must be ineligible for the $35 price-cap program baked into the deal, court documents clarify.

The amount a consumer may receive in cash from the settlement will be based on their past purchases of Eli Lilly insulin products and the total number of claims filed.

Lastly, court documents state that a consumer’s claim for relief from the settlement “does not expire by their death,” meaning that any class member whose death occurs during the relevant time period will be considered ineligible for the insulin value program and their surviving spouse or legal guardian may submit a claim for cash from the settlement fund.

Do I need to file a claim?

If you are eligible to receive a cash payment from the settlement, you’ll need to file a timely claim on the official settlement website, which has yet to go live. (ClassAction.org will update this page if and when the settlement site is launched, so be sure to check back often.)

Per court documents, the claims process for the insulin settlement is “designed to be as simple and convenient as possible, consistent with the integrity of the settlement.” Each claim for cash will be evaluated and reviewed by the settlement administrator, who, in most cases, will verify claims based on transactional data from pharmacy benefit managers, retail pharmacies and other sources without requiring claimants to submit additional documentation.

The administrator will not begin to review and evaluate claims until after the claim period ends, which will occur 30 days after the deal receives final approval from the court.

When will I receive cash from the settlement?

Cash will be distributed to eligible class members after the deal receives final approval from the court and any appeals are resolved, which can often take weeks or months.

Do I need to sign up for Eli Lilly’s Insulin Value Program?

For more information about Eli Lilly’s Insulin Value Program, head here.

How did we get here?

In February 2017, the plaintiffs filed a proposed class action in which they alleged Eli Lily and other insulin manufacturers had raised their list prices for the drug “in lockstep,” which enabled the cost of insulin for pharmacy benefit managers—and thus consumers—to skyrocket, essentially in perpetuity.

After six years of litigation, plaintiffs’ attorneys said, a “hard-fought” deal was reached with Eli Lilly that provides consumers with benefits “now rather than waiting years to obtain any potential recovery at trial.”

“The settlement provides no reversion to [Eli Lilly] and completely freezes the out-of-pocket insulin expenses for covered insulin products for the Settlement Class Members for four years, a very substantial concession in an era where drug prices are skyrocketing and inflation is generally a significant concern,” attorneys said in a memo.

The plaintiffs’ counsel emphasized to the court that the cost savings built into the settlement come amid “significant changes to the insulin marketplace,” as Eli Lilly recently announced list price reductions for its most commonly used insulin products. Pharma counterparts Novo Nordisk and Sanofi each lowered their own insulin list prices within days of Eli Lilly announcing its price cuts, the memo states.

“[Eli Lilly’s] commitment in the context of these fast-moving changes is a highly substantial factor that enhances the value of the non-monetary benefits provided by Lilly through this settlement and the litigation that preceded it,” attorneys said.

Eli Lilly, who has admitted to no liability or wrongdoing, said in a statement to Law360 that the settlement “is a reflection of our continued commitment to close gaps in the U.S. healthcare system for people with diabetes.”

Get class action lawsuit and settlement news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.