@angress at the grates Washington, EN: 20510 November 3, 2016 The Honorable Loretta E. Attorney General Department of Justice 950 Avenue NW Washington, DC 20530 The Honorable Edith Ramirez Chairwoman Federal Trade Commission 600 Avenue NW Washington, DC 20580 Dear Attorney General and Chairwoman Ramirez: We write to ask the Department of Justice and the Federal Trade Commission to investigate whether pharmaceutical companies manufacturing insulin products have colluded or engaged in anticompetitive behavior in setting their drug prices. The original insulin patent expired 75 years ago. Instead of falling prices, as one might expect after decades of competition, three drugmakers who make different versions of insulin have continuously raised prices on this life-saving medication. In numerous instances price increases have reportedly mirrored one another precisely.1 This is an issue of tremendous national signi?cance. Diabetes, a group of diseases that involve problems with the pancreas? production of the hormone insulin, can lead to severe health problems, including heart disease and stroke, kidney failure, amputations, and vision loss. These health consequences are devastating for individuals and their families and costly to treat. Nearly 30 million Americans have diabetes. In 2012, diabetes and prediabetes cost the U.S. $322 billion in medical costs and reduced productivity.2 Carolyn Johnson, ?Why treating diabetes keeps getting more expensive,? Washington Post (Oct. 31, 2016) (online at wonk/wp/ZO 16/ 10/3 see also (Robert Langreth, ?Hot Drugs Show Sharp Price Hikes in Shadow Market,? Bloomberg (May 6, 2015) (online at lockstep). 2 Timothy Dall et al., ?The Economic Burden of Elevated Blood Glucose Levels in 2012: Diagnosed and Undiagnosed Diabetes, Gestational Diabetes Mellitus, and Prediabetes,? Diabetes Care (Dec. 2014) (online at 172); Centers for Disease Control and Prevention, ?Diabetes: Working to Reverse the US Epidemic At a Glance 2016? (online at see also American Diabetes Association ?The Staggering Costs of Diabetes in America,? (online at The Honorable Loretta .E. The Honorable Edith Ramirez Page 2 The p11ces of these medications have skyrocketed 111 recent years. The p1 ice of insulin mo1e than tripled between 2002 and 2013?f10m $231 to $736 pe1 year pe1 patient. From 2010 to 2014, Lantus, made by Sanofl, increased 1n price by 168 percent; Humalog, made by Eli Lilly, increased by 103 percent; and anuv1a and Janumet, made by Merck Co., both 1nc1 eased by 75 per4cent. The top 10 diabetes drugs b1ought 1n more than $28 billion 111 sales 1n 2013. 5 TheSe high and still rising prices have a signi?cant impact on federal spending. The American Diabetes Association estimates that the government pays for nearly two-thirds of diabetes care in the U.S. through various insurance programs.6 In 2015, Medicare spent more per bene?ciary on diabetes medications than on any other class of drugs, primarily due to rising prices.7 The market entry price of ?follow-on? insulin products, which largely duplicate existing drugs, are partially informed by the high prices of available therapies. Patients and taxpayers may not realize the savings that could be gained if existing insulin products were less expensive. We have also heard from our constituents that the life-saving insulin they need is increasingly unaffordable. About six million Americans use insulin, and for many patients, switching between insulin brands can be dif?cult because the medicines are not completely interchangeable.8 Not only have these pharmaceutical companies raised insulin prices significantly? sometimes by double digits overnight?in many instances the prices have apparently increased in tandem. According to Bloomberg: On May 30 last year, the price for a vial of the blockbuster diabetes medication Lantus went up by 16.1 percent. On the next day, Lantus?s direct competitor, Levemir, also registered a price increase?of 16.1 percent. The pattern repeated itself six months later when Lantus, from French drugmaker Sano?, was marked up 11.9 percent, and Levemir, made by Novo Nordisk matched again exactly. 3 Ed Silverman, ?Insulin prices have skyrocketed, putting drug makers on the defensive,? (Apr. 5, 2016) (online at 4 Chris Canipe and Joseph Walker, ?How Drug Company Revenue Is Driven by Price Increases,? Wall Street Journal (Oct. 5, 2015) (online at see also Joseph Walker, ?For Prescription Drug Makers, Price Increases Drive Revenue,? Wall Street Journal (Oct. 5, 2015) (online at 1 444096750). 5 Eric Palmer, ?The top 10 best?selling diabetes drugs 01?20] (June 17, 2014) (online at ?ercepharma.com/pharma/top- 3). 6 American Diabetes Association, ?The Cost of Diabetes,? (last updated June 22, 2015), (online at 7 Express Scripts, ?Express Scripts 2015 Drug Trend Report Medicare,? (Mar. 2016) (online at 8 Rebecca Robbins, ?The insulin market is heading for a shakeup. But patients may not bene?t,? STAT (Oct. 14, 2016) (online at The Honorable Loretta E. The Honorable Edith Ramirez Page 3 In 13 instances since 2009, prices of Lantus and Levemir?which dominate the global market for long-acting injectable insulin with $11 billion in combined sales?have gone up in tandem in the U.S., according to SSR Health, a market researcher in Montclair, New Jersey.9 From 2014 to 2015, the price of both Sano??s Lantus and Novo Nordisk?s Levemir reportedly went up by 29.9 percent, and each drug had a wholesale price of precisely $29.82 per milliliter. Eli Lilly, the manufacturer of Humalo g, and Novo Nordisk, which makes Novolog, have also on several occasions increased prices in lockstep.10 The chart below from STAT shows how four different widely-prescribed insulin products have risen in price together:ll As insulin prices rise, slow-acting and fast-acting drugs rise together $300 Sanofi's Lantus (Slow) -- Novo Nordisk?s Levemir Slow) Eli Lilly?s Humalog Fast) Novo Nordisk?s NovoLog Fast) $225 $150 vial in US dollars $75 insulin lisrpn'ce per $0 2000 2005 2010 2015 Year SCI 0 x? STAT Source: Truman Analytics In fact, Eli Lilly and other companies have been ?ned in Mexico for colluding on insulin pricing Mexico?s antitrust commission ?ned Eli Lilly Mexico and three other companies in 2010 for taking turns placing winning bids for government contracts to buy insulin?arti?cially in?ating prices by agreeing not to compete. 12 9 Robert Langl'eth, ?Hot Drugs Show Sharp Price Hikes in Shadow Market,? Bloomberg (May 6, 2015) (online at (emphasis added); IO Id. Rebecca Robbins, ?The insulin market is heading for a shakeup. But patients may not bene?t,? STAT (Oct. 14, 2016) (online at '2 Noel Randewich, ?Mexico ?nes Eli Lilly, others for collusioti,? Reuters (Feb. 23, 20 I 0) (online at The Honorable Loretta E. The Honorable Edith Ramirez Page 4 We are concerned that the potential coordination by these drugmakers may not simply be a case of ?shadow pricing,? but may indicate possible collusion, and we believe this egregious behavior warrants a thorough investigation. We urge the Justice Department and the Federal Trade Commission to investigate any anticompetitive conduct by insulin manufacturers and take any necessary action to protect consumers and taxpayers. Thank you for your attention to this matter. Sincerely, Bernard Sanders Elijah Cummings Ranking Member Ranking Member Subcommittee on Primaiy Health Committee on Oversight and and Retirement Security I Government Reform Committee on Health, Education, United States House of Representatives Labor and Pensions United States Senate