Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 1 of 109
`
`Exhibit B
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 2 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 2 of 109
`
`TABLE OF CONTENTS
`
`II.
`
`Il.
`
`B.
`
`Introduction..............ccccsccssceesseeSeddeuestinaactingcasaaaSevbsaseanaanssegqaaaskanesdigads 1
`PAPCOSossiccscnevvevnvvnccssdcvsscasssduccacesnscessdesesdsonaeanneanesessppobecaucncvnannenabaeaive 8
`A.
`PUSDIHIEE issgesovsezesbevsispansassbivesgingnayiasenouteigaieertesedsaseadsseasdadesinitsesshdsastionecs:, 8
`B.
`Manufacturer Defendants.........cssssssssscssssscsssssssessssssssentestsssssssestessesessseseece. 8
`C.
`PIM Defendants...a yssedasecasassasscatsnsosiessanennssaissbcauisticressssamsbevaceaiomunasertesess.c 12
`Sovereign Interest..........ecccssseeeeeeddenwusennnanbeaeedeearbobienssunannevanssosds>rear 33
`Jurisdiction and Venue .........ccsssssesesesscssssssesesressasacassversscesesescesseeses 34
`A.
`Subject Matter Jurisdiction.............sscsssssssssssssssesssssssesssisssssesssssssseeeeeeeeeccc 34
`B.
`Personal Jurisdiction.........scssscsssssscsresessusssnasssysevecsssasesssesessuserstsseceseseccessec, 34
`C.
`VERE saavassasensundetgeonnsoohineschisaeahisncchinbistsyepanddnitsueatoeatantatdeesvaseewscaeesaageccsens:35
`Factual Allegations.......siendaaeanessguaaaseauaavedadisrasngssestineahapauaienbacéeswees 5
`A.
`Diabetes and Insulin Therapy .......ssscsssscssssesssssvesessssessssssssssssessssssessesseeoeccc.35
`* Diabetes: A Growing Epidemic..........cc:ccssssssssssesssssesesssesssssesesseeessosesccce,35
`¢
`Insulin: A Century Old Drug.........ccccsessesssessscssesecsesssessssesuseceeeeseeccccccce., 36
`¢ CurrentInsulin Landscape .........cccssscsessessesssssesssssessesssessasssseseseeceseecess. 39
`*
`Insulin Adjuncts: Type 2 Medications........ccc:ccs-csesssssesseceseseoseessecccccc... 40
`The Dramatic Rise in the Price of Diabetes Medications ......................... 43
`e Defendant Manufacturers Have Increased Pricesin Lockstep............ 49
`Pharmaceutical Payment and Supply Chaitt.c....e.cccccssssssseesecsseeeceseeecossccc..,54
`© Drug Costs for Diabetics ............:cscssssssesesssesrssssussessesscstsssstsessessevessescess55
`PBMsRole in the Pharmaceutical Payment Chain ..ceccecescccsoeeosecseeoeecssccs...56
`¢ The Rise of the PBMsin the Pharmaceutical Supply Chain ................59
`e
`Insular Nature ofthe Pharmaceutical IMGUSEY .........s0secsecsscssccceperssseres 61
`TheInsulin Pricing Scheme..........sescssssessessessessessusssecsssstssssssosecoeeeecccseece.n. 63
`
`ba,
`
`D.
`
`E.
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 3 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 3 of 109
`
`F,
`
`G.
`
`Defendants Admit That They Have Engaged in TheInsulin Pricing
`Scheme AndThatIt Is Harming Diabetics ..........cccecceserecsresreresteseensenneena65
`
`Defendants Profit Off the Insulin Pricing Scheme............::sesceseseeereeteeee 70
`
`¢
`
`e
`
`*
`
`PBMsPocket a Majority of Manufacturers’ Secret Payments............... 71
`
`Insulin Pricing Scheme Allows PBMsToProfit Off Pharmacies..........74
`
`Insulin Pricing Scheme Increases PBMs Mail OrderProfits...........++++ 75
`
`H.
`
`Defendants Deceived Diabetic Mississippians andtheState of
`MiSSiSSiPPi.........+cecessseesessssssescecseeesersenaenesnsenassesensesenacnenanecenanssanenanensyasgeoeesee76
`
`* Manufacturer Defendants Deceived the State and Mississippi
`LDfeabehe is 3iss acaba iieiavas tea veo cunsabinnvenvsita paneedicpivehvunacerasencsntasaaaivonaseseper sees76
`
`»
`
`PBM Defendants Deceived the State and Mississippi Diabetics........... 77
`
`I,
`
`J.
`
`The Insulin Pricing Scheme Has DamagedtheState of Mississippi
`and Diabetic MissisSippiaMs...........:c:sssecsessecesessensensensnenseeneesensceceenecasnanaenes 84
`
`* The Insulin Pricing Scheme Has Damagedthe State.........-.sesessesseneees 84
`
`«
`
`TheInsulin Pricing Scheme Has Damaged MississippiDiabetics....... 85
`
`Defendants’ Recent Efforts to Address Insulin Pricing Falls Far
`Short ofAddressing the Problem .........:ssessssrssessseseeetseseeerseestenntennenaesseaennes87
`
`TOLLING OF STATUTE OF LIMITATIONG. .......+cceseeessescesenees Sppaanswoed 88
`
`A.
`
`B.
`
`Cc.
`
`Discovery Rule Tolling..........c:sccscssescesesccseeesesnenecensesneesscanenenseneaneneacenanenens 89
`
`Fraudulent ConcealmentTolling .........-scccesececseseerrereeesceteeeeseestnaentennenes 90
`
`EStoppel........ccssesseseesecesesssesnsearsenerssessnsususuensnsnsnnsnnensracssasnensuceneanessntaneeeyeeses 90
`
`D.—Continuing Violations.........sccccscseseseeseeseseenseneereensessenescnennsenennsnensnsansnracensees go
`
`Claims for Relief........ eseetaae COFFS SRE S PHO ROTTB e Eee tba eeeeeee efter eeeeeene PP e PRR Rete eee 90
`
`1.
`
`2.
`
`Mississippi ConsumerProtection Act. Miss. Code §§ 75-24-1, el seq
`(By the State in its parens patriae capacity on behalf of Mississippi
`diabetics against Defendants)..........:-ssscesseesessseneerenssseneneesaceneneananensenaranenys 90
`
`Mississippi ConsumerProtection Act. Miss. Code §§ 75-24-1, et seq
`(By the Statein its capacity as a payor for and purchaser of the at-
`issue diabetes medications against Defendants) ..........+-::sssseeeeeneenseresees 94
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 4 of 109
`Case 3:21-cv-00674-KHJ-MTP Document1-5 Filed 10/21/21 Page 4 of 109
`
`3.
`
`4.
`
`5.
`
`Unjust Enrichment(Bythe State in its parens patriae capacity on
`behalf of Mississippi diabetics against Defendants)..............c:csccssreeeseeseees 97
`
`Unjust Enrichment(Bythe State in its capacity as a payor for and
`purchaserofthe at-issue diabetes medications against Defendants)....... 99
`
`Civel CONSPITAGY: | sascssaieasccasesszetassacopsvsdesecosboeusyedsusnesnaioussnvnecdyndetopenveeuadderies 100
`
`VII. Motion for Injunction
`
`VIII. AD DAMNDM ................0c0eeeeee anausadecancnesranacaseonecgvosendsssssssee baaeeesvaveeelO3
`
`TABLE OF FIGURES
`
`Figure 1: Price Increase of Insulin vs. Selected Consumer Goods from 1997-2018......:...4
`
`Table 1: Diabetes medications at issue in this CaS€
`
`...c....ecceeeceeeseeeeececeneeeseeeetaeseeseeaeeeeees 42
`
`Figure 2: Rising reported prices of Humulin R (500U/mL) from 1997-2021................. 44
`
`Figure 3: Rising reported prices of Humalogvials and pens from 1996-2021............-.+:45
`
`Figure 4: Rising reported prices of Levemir from 2006-2021..0........:.cccecsesseseesseeseeeeeeees 46
`
`Figure 5: Rising reported prices of Novolog vials and pens from 2002-2021...........0047
`
`Figure 6: Rising reported prices of Lantusvials and pens from 2001-2021.................. 48
`
`Figure 7: Rising reported prices of long-acting IMSUIINS..............::cecsersecseereseeseeseeeeesseeees 50
`
`Figure 8: Rising reported prices of rapid-acting insulins... eccccesteeteeseseeeteeeeeseeeeene 51
`
`Figure 9: Rising reported price increases for human insulins.........0..cccecceceeeeeseeeeeneeneee52
`
`Figure 10: Rising reported prices of Type 2 Crugs ......ccsssecsessressseseesseseesseseceeseesenseseeereees 53
`
`Figure 11: Lockstep insulin price increases ..........:sessesessrsesesseeseeseessessesessarnanssesacnsnagees®54
`
`Figure 12: Insulin distribution and payment chain ...........:c.scccsseesseescssceeeseeseeseeseasereennenees 57
`
`Figure: 132 PEM COnSONAIUOA «..2:.dercyancarsasescosaryecbensqnvervioesaceen ar ahvebengiestetveldatenplacvabonennnt hy 60
`
`il
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 5 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 5 of 109
`
`The Honorable Lynn Fitch, Attorney General, brings this action on behalf of the
`
`State of Mississippi (the “State” or “Plaintiff’), in its proprietary capacity andin its
`
`capacity as parens patriae, for restitution, damages, punitive damages, disgorgement,
`
`penalties and injunctiverelief underthe lawsofthe State of Mississippi against the above-
`
`named Defendants.
`
`I.
`
`Introduction
`
`1.
`
`Diabetes is an epidemic in Mississippi. Mississippi has the highest
`
`prevalence of diabetes in the United States with 13.6% of its population—over 400,000
`
`people—living with diabetes. An additional 750,000 Mississippi
`
`residents have
`
`prediabetes, which is when a person's blood sugarlevel is higher than it should be and
`
`signifies that the personis at a much greaterrisk for developing diabetes.
`
`2.
`
`Diabetes is the leading cause of blindness, kidney failure and lower limb
`
`amputations and is the seventh leading cause of death in Mississippi despite the
`
`availability of effective treatment. Over 22% of all hospitalizations in Mississippi are
`
`attributable to diabetes.
`
`3.
`
`The economic impact of diabetes is staggering. Thetotal estimated cost of
`
`diagnosed diabetes in Mississieppi is $3.5 billion per year. Onein four health care dollars
`
`is spent caring for people with diabetes.
`
`4.
`
`Approximately 100,000 Mississippians rely on daily insulin treatments to
`
`survive, and 300,000 diabetics in Mississippi use either oral medications, insulin or a
`
`combination of both to treat and control diabetes. As a result, hundreds of thousands of
`
`Mississippi residents must rely on the companies that manufacture diabetes medications
`
`to stay alive and thusare at the mercy of these manufacturers.
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 6 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 6 of 109
`
`DefendantsEli Lilly, Novo Nordisk and Sanofi (collectively, “Manufacturer
`5.
`Defendants” or “Manufacturers”) manufacture the vast majority of insulins and other
`diabetic medicationsavailable in the United States.
`
`Defendants CVS Caremark, Express Scripts and OptumRx (collectively
`6.
`“PBM Defendants” or “PBMs”) manage the pharmacy benefits for the vast majority of
`individuals in the United States.
`
`As part of this work, PBM Defendants establish national formulary offerings
`-
`that, among otherthings,set the baseline for which diabetes medications are covered and
`
`not coveredby nearly every payorin the United States
`
`The PBM Defendants understand that their national formulary offerings
`8.
`drive drugutilization.
`
`The more accessible a drug is on the PBMs’ national formulary, the more
`9.
`that drug will be used throughout the UnitedStates, including in Mississippi.
`10.
`The Manufacturer Defendants likewise understand that
`
`the PBM
`
`Defendants’ national formularies drive drug utilization throughout the country and in
`Mississippi.
`
`11.
`
`Given the PBMs’ market power and the crucial
`
`role their standard
`
`formularies play in the pharmaceutical pricing chain, both Defendant groups understand
`that the PBM Defendants wield enormouscontrolover drug purchasing behavior.
`
`The fraudulent conspiracy at the root of this Second Amended Complaint—
`12.
`the Insulin Pricing Scheme—was born from this mutual understanding.
`
`Over the courseofthelast fifteen years, and pursuantto the Insulin Pricing
`13.
`Scheme, Manufacturer Defendants have in lockstep raised the reported prices of their
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 7 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 7 of 109
`
`respective diabetes drugs in an astounding mannerdespite thefact that the costto produce
`these drugs has decreased during that same timeperiod.
`
`Insulins, which today cost Manufacturer Defendants less than $2 to produce
`14.
`and that wereoriginally priced at $20 whenreleasedin the late 1990s, now range between
`
`$300 and $700.
`
`15.
`
`Inthe last decade alone, Manufacturer Defendants have in tandem increased
`
`the prices of their insulins up to 1000%, taking the same increase down to the decimal
`
`point within a few daysof each other.
`
`16. Figure1illustrates the rate in which DefendantEli Lilly raised the price of
`
`its analog insulin, Humalog, compared to the rate ofinflation for other consumer goods
`and services from 1997-2018.
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 8 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 8 of 109
`
`Figure 1: Price Increase of Insulin vs. Selected Consumer Goods
`from 1997-2018
`
`Price Changes (1997-2018)
`Selected U.S. Consumer Goods andServices
`
`iy
`
`Laser
`:
`
`Pate,
`
`Lau
`
`isu
`
`Lanse
`
`a)
`
`850
`
`aah
`
`bath
`
`sale
`
`450
`
`yay
`
`dai
`
`path:
`
`ath
`
`a
`
`Insulin
`(Hum alog)
`KoO51-
`1527%
`
`—All Items
`
`—Food
`
`Housing
`
`—Apparel
`
`—Transportation
`
`—Medical Care
`Services
`—Recreation
`
`—Education
`
`—— eee
`
`1997
`Sources: Bureau of Labor Statistics; Truven Health Analytics
`
`Z0HIT
`
`2018
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 9 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 9 of 109
`
`17.|Remarkably, nothing about these medications has changed during that time
`
`period; today’s $350 insulin is the exact same one Defendants originally sold for $20.
`
`18.|The current exorbitantprice stands in stark contrast to insulin’s origins: the
`
`discoverers sold the original patent for $1 to ensure that the medication would remain
`
`affordable. Today, insulin has become the poster child for skyrocketing pharmaceutical
`
`prices.
`
`19.
`
`Both the Manufacturer and PBM Defendants play vital roles and profit
`
`immensely from the Insulin Pricing Scheme.
`
`20.
`
`The Insulin Pricing Scheme works as follows:first, to gain formulary access
`
`from the PBM Defendants for their diabetic treatments, Manufacturer Defendants
`
`artificially andwillingly raise their prices, and then secretly pay a significant portion of
`
`that price back to the PBMs. These Manufacturer Payments' are provided undera variety
`
`of labels—rebates, discounts,credits, inflation/price protection fees, administrationfees,
`
`etc, Yet, however they are described, these Manufacturer Payments, alongwith the inflated
`
`reportedprices, are guid pro quo for formulary inclusion in their national offerings.
`
`21.
`
` PBMsthen grantnational formulary status based upon the highest inflated
`
`price and upon which diabetes medications generatethe largest profits for these PBMs.
`
`22,
`
`The Insulin Pricing Scheme creates a “best of both worlds” scenario for
`
`Defendants. Manufacturer Defendants are able to make these secret Manufacturer
`
`‘In the context of this Second Amended Complaint, the term “Manufacturer Payments”is defined
`as all payments or financial benefits of any kind conferred by the Manufacturer Defendants to
`PBM Defendants(or a subsidiary,affiliated entity, or group purchasing organization or rebate
`aggregatoracting on the PBM’sbehalf), either directly via contract or indirectly via Manufacturer-
`controlled intermediaries. Manufacturer Payments includesrebates, administrativefees,inflation
`fees, pharmacy supplementaldiscounts, volume discounts, price or margin guarantees and any
`other form of consideration exchanged.
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 10 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 10 of 109
`
`Payments to buy preferred formulary position—which significantly increases their
`
`revenue—withoutsacrificing their profit margins.
`
`23.|PBM Defendantsprofit off theartificially inflated prices that result from the
`
`scheme in numerous ways,
`
`including:
`
`(1) retaining a significant—yet undisclosed—
`
`percentage of the secret Manufacturer Payments, (2) using the price produced by the
`
`Insulin Pricing Schemeto generate profits from pharmaciesand(3) relying on those same
`
`artificial prices to drive up the PBMs’ margins through their own mail order pharmacies.
`
`24.
`
`Thus, while the PBM Defendantsrepresent both publicly andto theirclients
`
`that they use their market power to drive down prices for diabetes medications, these
`
`representationsarepatently false. Instead, the national negotiations, secret Manufacturer
`
`Payments (exchanged for formulary inclusion) and the actual formulary construction,
`
`which undergird Defendants’ fraudulent scheme, are directly responsible for the
`
`skyrocketing price ofinsulin.
`
`25. Moreover, because the price, which every entity within the pharmaceutical
`
`pricing chain pays, is based upon the Manufacturers’reported price, every single diabetic,
`
`payor and health plan in the UnitedStates, including in Mississippi, who purchases these
`
`life-sustaining drugs, has beendirectly and detrimentally affected by Defendants’ Insulin
`
`Pricing Scheme.
`
`26.
`
`Payors who reimbursefor the at-issue diabetes medications, including the
`
`State of Mississippi, have been overcharged millions ofdollars a year.
`
`27,
`
`Diabetics, including those in Mississippi, have been overcharged millionsof
`
`dollars a year as well in out-of-pocketcosts.
`
`28.
`
`For diabetic Mississippians, the physical, emotional, and financialtolls of
`
`paying suchexcessive prices for diabetes medicationsis devastating. Unable to afford the
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 11 of 109
`Case 3:21-cv-00674-KHJ-MTP Document1-5 Filed 10/21/21 Page 11 of 109
`
`drugs their doctors prescribe, many diabetics in Mississippiare forcedto ration or under-
`
`dosetheir insulin, inject expired insulin, reuse needles, and starve themselves to control
`
`their blood sugars with as little insulin as possible. These behaviors are extremely
`dangerousandcanleadto serious complicationsor even death.
`
`The Honorable Lynn Fitch, Attorney General seeks legal relief against the
`29.
`Defendantsto protect the health and economic well-being of the hundreds ofthousands of
`
`diabetic citizens of the State of Mississippi and to protect the economicinterests of the
`
`State as a payor for and purchaserofmillions of dollars per year in Defendants’ diabetes
`
`medications.
`
`30.
`
`The Honorable LynnFitch, Attorney General, brings this action on behalfof
`
`the State of Mississippiandits citizens in three distinct capacities: (a) on behalfofdiabetic
`
`Mississippians in its parens patriae capacity, (b) on behalf of the State as a payor of
`
`diabetes medications through its state government employee health plans, and (c) on
`
`behalf of the State as a purchaserof diabetes medicationsin state-run facilities, including
`
`through the Mississippi Department of Corrections andstate-run hospitals.
`
`31.
`
`This action asserts causes for Defendants’ violation of the Mississippi
`
`ConsumerProtection Act, unjust enrichment andcivil conspiracy.
`
`32.
`
`This action seeks injunctive relief,
`
`restitution, disgorgement, actual
`
`damages, punitive damagesandcivil penalties to address and abate the harm caused by
`
`the Insulin Pricing Scheme.
`
`33.
`
`Therelevant period for damagesalleged in this Second Amended Complaint
`
`is from 2003 continuing throughthe present.
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 12 of 109
`Case 3:21-cv-00674-KHJ-MTP Document1-5 Filed 10/21/21 Page 12 of 109
`
`A.
`
`Plaintiff
`
`Il.
`
`Parties
`
`34.
`
`Plaintiff, the State of Mississippi. The State of Mississippi is the sole
`
`Plaintiff in this action, brought in its name onrelation of the Attorney General, the
`
`Honorable LynnFitch. Pursuant to Miss. Const. art. 6, § 173, Miss. Code Ann.§ 7-5-1, and
`
`Miss. Code Ann. §§ 75-24-1, et seq., the Attorney General brings this action in the State’s
`
`sovereign capacity on behalf of the State and its citizens who are residents of the State of
`
`Mississippi.
`
`B. Manufacturer Defendants
`
`35. Defendant Eli Lilly and Company (“Eli Lilly)
`
`is an Indiana
`
`corporation with its principal place of business at Lilly Corporate Center, Indianapolis,
`
`Indiana 46285.
`
`36.
`
`Eli Lilly is registered to do business in Mississippi and hasbeen sinceat least
`
`1966. Eli Lilly may be served throughits registered agent: NRAI Agents,Inc., 645 Lakeland
`
`East Dr., Suite 101, Flowood, Mississippi 39232.
`
`37.
`
`Eli Lilly holds an active Drug Facility Permit with the Mississippi Board of
`
`Pharmacy (License #: 15663/16.5a).
`
`38.
`
`In Mississippi and nationally, Eli Lilly manufactures, promotes and
`
`distributes several at-issue diabetes medications: Humulin N, Humulin R, Humalog,
`
`Trulicity and Basaglar.
`
`39._Eli Lilly’s global revenues in 2019 were $4.13 billion from Trulicity, $2.82
`
`billion from Humalog, $1.29 billion from Humulin and $1.11 billion from Basaglar.
`
`40.
`
`Eli Lilly’s global revenues in 2018 were $3.2 billion from Trulicity, $2.99
`
`billion from Humalog, $1.33 billion from Humulin and $801 million from Basaglar.
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 13 of 109
`Case 3:21-cv-00674-KHJ-MTP Document1-5 Filed 10/21/21 Page 13 of 109
`
`41._Eli Lilly transacts business in Mississippi, targeting the State of Mississippi
`marketfor its products, including the at-issue diabetes medications.
`
`42._Eli Lilly employs sales representatives throughout Mississippi, to promote
`and sell Humulin N, Humulin R, Humalog,Trulicity and Basaglar.
`
`Eli Lilly also directs advertising and informational materials to Mississippi
`43.
`physiciansandpotential usersofEli Lilly’s products.
`
`44.
`Atall times relevanthereto, in furtherance ofthe Insulin Pricing Scheme,Eli
`Lilly publishedits prices of the at-issue diabetes medications throughout Mississippi for
`the purpose of payment and reimbursement by Mississippi residents and payors in
`
`Mississippi, including the State.
`
`45.
`
`During the relevanttime period, the State of Mississippi spent millions of
`
`dollars per yearon Eli Lilly's at-issue drugs throughits employee health plans and through
`purchasesfor use in state-run facilities.
`
`46.
`
`During the relevant time period, diabetics in Mississippi spent millions of
`
`dollars per year out of pocket on Eli Lilly's at-issue drugs.
`
`47.
`
`All of the Eli Lilly diabetes medications related to the at-issue transactions
`
`were paid for and/or reimbursed in Mississippi based on the specific false and inflated
`
`prices Eli Lilly caused to be published in Mississippiin furtheranceof the Insulin Pricing
`
`Scheme.
`
`48. Defendant Sanofi-Aventis U.S. LLC (“Sanofi”) is a Delaware limited
`
`liability company with its principal place of business at 55 Corporate Drive, Bridgewater,
`
`NewJersey 08807.
`
`49.
`
`Sanofi may be served through its registered agent: Corporation Service
`
`Company, 251Little Falls Drive, Wilmington, Delaware 19808. Sanofi’s sister company,
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 14 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 14 of 109
`
`Sanofi PasteurInc., is registered to do business in Mississippi and has beensinceatleast
`
`1992.
`
`50.
`
`Sanofi holds three active Drug Facility Permits with the Mississippi Board of
`
`Pharmacy (License #s: 16521 / 16.5a, 16520 / 16.5a, and 16519 / 16.5a).
`
`51.
`
`Sanofi manufactures, promotes anddistributes pharmaceutical drugs both
`
`in Mississippi and nationally, including several at-issue diabetes medications: Lantus,
`
`Toujeo and Apidra.
`
`52.
`
` Sanofi’s global revenues in 2019 were $3.50 billion from Lantus, $1.03
`
`billion from Toujeo and $400 million from Apidra.
`
`53.
`
` Sanofi’s global revenues in 2018 were $3.9 billion from Lantus, $923 million
`
`from Toujeo and $389 million from Apidra.
`
`54.
`
`Sanofi transacts business in Mississippi, targeting the Mississippi market for
`
`its products,including the at-issue diabetes medications.
`
`55.
`
` Sanofiemploys sales representatives throughout Mississippi to promote and
`
`sell Lantus, Toujeo and Apidra.
`
`56.
`
`Sanofi also directs advertising and informational materials to Mississippi
`
`physicians andpotential users of Sanofi’s products.
`
`57.
`
`At all times relevant hereto, in furtherance ofthe Insulin Pricing Scheme,
`
`Sanofi publishedits prices ofits at-issue diabetes medications throughoutMississippi for
`
`the purpose of payment and reimbursement by Mississippi residents and payors in
`
`Mississippi, including the State.
`
`58.
`
`Duringtherelevant time period, the State of Mississippi spent millions of
`
`dollars per year on Sanofi's at-issue drugs throughits employee health plans and through
`
`purchasesforusein state-run facilities.
`
`10
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 15 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 15 of 109
`
`During the relevant time period, diabetics in Mississippi spent millions of
`59.
`dollars per year out of pocket on Sanofi’s at-issue drugs.
`
`60.
`
`All of the Sanofi diabetes medicationsrelated to the at-issue transactions
`
`were paid for and/or reimbursed in Mississippi based on the specific false and inflated
`prices Sanofi caused to be published in Mississippi in furtherance of the Insulin Pricing
`Scheme.
`
`61.
`
`Defendant Novo Nordisk Inc. (“Novo Nordisk”) is a Delaware
`
`corporation with its principal place of business at 800 Scudders Mill Road, Plainsboro,
`
`New Jersey 08536.
`
`62.
`
`Novo Nordisk may be served throughits registered agent: The Corporation
`
`Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
`
`19801.
`
`63.
`
`Novo Nordisk holds an active Drug Facility Permit with the Mississippi
`
`Board of Pharmacy (License #: 17784 / 16.4a).
`
`64.
`
`Novo Nordisk manufactures, promotes and distributes pharmaceutical
`
`drugs bothin Mississippi and nationally, including at-issue diabetic medications: Novolin
`
`R, Novolin N, Novolog, Levemir, Tresiba, Victoza and Ozempic.
`
`65.—Nordisk’s global revenues in 2019 were $2.89 billion from Novolog, $973
`
`million from Levemir, $968 million from Tresiba, $2.29 billion from Victoza and $1.17
`
`billion from Ozempic.
`
`66.
`
`Novo Nordisk’s global revenues in 2018 were $4.19 billion from Novolog,
`
`$1.66 billion from Levemir, $1.19 billion from Tresiba, $3.61 billion from Victoza and $185
`
`million from Ozempic.
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 16 of 109
`Case 3:21-cv-00674-KHJ-MTP Document1-5 Filed 10/21/21 Page 16 of 109
`
`Novo Nordisk transacts businessin Mississippi, targeting Mississippiforits
`67.
`products, includingthe at-issue diabetes medications.
`
`to
`Novo Nordisk employs sales representatives throughout Mississippi
`68.
`promoteandsell Novolin R, Novolin N, Novolog, Levemir, Tresiba, Victoza and Ozempic.
`69.
`Novo Nordisk also directs advertising and informational materials to
`
`Mississippi physicians and potential users of Novo Nordisk’s products.
`
`70.
`
`At all times relevant hereto, in furtherance of the Insulin Pricing Scheme,
`
`Novo Nordisk published its prices of its at-issue diabetes medications throughout
`Mississippi for the purpose of payment and reimbursement by Mississippi residents and
`
`payors in Mississippi, including theState.
`
`71.
`
`Duringthe relevant time period, the State of Mississippi spent millions of
`
`dollars per year on Novo Nordisk’s at-issue drugs through its employee health plans and
`
`through purchasesforuse in state-runfacilities.
`
`72.
`
`During the relevant time period, diabetics in Mississippi spent millions of
`
`dollars per year out of pocket on Novo Nordisk’s at-issue drugs.
`
`73.
`
`All of the Novo Nordisk diabetes medications related to the at-issue
`
`transactions were paid for and/or reimbursed in Mississippi based on the specific false
`
`and inflated prices Novo Nordisk caused to be published in Mississippi in furtheranceof
`
`the Insulin Pricing Scheme.
`
`74.
`
`Collectively, Defendants Eli Lilly, Novo Nordisk and Sanofi are referred to as
`
`“Manufacturer Defendants” or “Manufacturers.”
`
`C.
`
`PBM Defendants
`
`75. Defendant CVS Health Corporation (“CVS Health”) is a Delaware
`
`corporation withits principal place of business at One CVS Drive, Woonsocket, Rhode
`
`12
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 17 of 109
`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 17 of 109
`
`Island 02895. CVS Health transacts business and has locations throughout the United
`States and Mississippi.
`
`CVS Health may be served throughits registered agent: The Corporation
`76.
`Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
`19801.
`
`CVS Health—throughits executives and employees, including its CEO, Chief
`77-
`Medical Officer, Executive Vice Presidents, Senior Executives in Trade Finance, Senior
`Vice Presidents and Chief Communication Officers—are directly involvedin creating and
`implementing the company policies that
`inform its PBM services and formulary
`construction, including with respect to the at-issue drugs involvedin the Insulin Pricing
`Scheme. CVS Health’s conduct had a direct effect in Mississippi and damaged diabetic
`Mississippians and the State. On a regular basis, CVS Health executives and employees
`communicate with and direct its subsidiaries related to the at-issue PBM services and
`
`formulary activities.
`
`78.
`
`In each annual report for at least the last decade, CVS Health (orits
`
`predecessor) has repeatedly andexplicitly stated that CVS Health:
`
`e designs pharmacy benefit plans that minimize thecosts to the client while
`prioritizing the welfare and safety of the clients’ members;
`
`®
`
`*
`
`negotiates with pharmaceutical companies to obtain discounted acquisition
`costs for many of the products on CVS Health’s drug lists, and these
`negotiated discounts enable CVS Health to offer reduced costs to clients;
`
`utilizes an independent panel of doctors, pharmacists and other medical
`experts, referred to as its Pharmacy and Therapeutics Committee, to select
`drugsthat meetthe highest standards ofsafety andefficacy for inclusion on
`its druglists.
`
`79.
`
`CVS Health publicly represents that CVS Health constructs programsthat
`
`lower the cost of the at-issue diabetes medications. For example, in 2016, CVS Health
`
`13
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 18 of 109
`Case 3:21-cv-00674-KHJ-MTP Document1-5 Filed 10/21/21 Page 18 of 109
`
`announceda new program to “reduce overall spendingin diabetes” thatis available in all
`states, including Mississippi,stating:
`“CVS Health introduced a new program available to help the company’s
`pharmacy benefit management
`(PBM) clients to improve the health
`outcomes of
`their members,
`lower pharmacy costs [for diabetes
`medications] through aggressive trend managementand decrease medical
`costs .. . [and that] participating clients could save between $3000 to $5000
`per year for each member who successfully improves control of their
`diabetes” (emphasis supplied).
`
`In2017, CVS Health stated that “CVSHealth pharmacy benefit management
`80.
`(PBM)strategies reducedtrend for commercial clients to 1.9 percent per memberperyear
`the lowest in five years. Despite manufacturer price increases of near 10 percent, CVS
`Health kept drug price growth at a minimal 0.2 percent.”
`81.
`CVS Health has entered into contracts and business relationships in
`Mississippi, including in 2015 when CVS Health announceda clinical affiliation with the
`University of Mississippi Medical Center to provide integrated health information in order
`
`to allow patients to better monitortheir chronic diseases, such as diabetes.
`
`CVS Health is the immediate or indirect parent of many pharmacy
`82.
`subsidiaries that own and operate hundreds of pharmacies throughout Mississippi that
`dispensed and received payment for the at-issue diabetes medications throughout the
`relevant time period.
`
`83. Defendant CVS Pharmacy,Inc. (“CVS Pharmacy”) is a RhodeIsland
`
`corporation whoseprincipal place of businessis at the samelocation as CVS Health. CVS
`
`Pharmacy is a wholly owned subsidiary of CVS Health.
`
`CVS Pharmacy is the immediate or indirect parent of many pharmacy
`84.
`subsidiaries that own and operate hundreds of pharmacies throughout Mississippiandis
`
`14
`
`

`

`Case 3:21-cv-00674-KHJ-MTP Document 1-5 Filed 10/21/21 Page 19 of 109
`Case 3:21-cv-00674-KHJ-MTP Document1-5 Filed 10/21/21 Page 19 of 109
`
`directly involved in these pharmacies dispensing and paymentpolicies related to the at-
`
`issue diabetes medications.
`
`85.
`
`CVS Pharmacy is also the immediate and direct parent of Defendant
`
`Caremark Rx, L.L.C.
`
`86.
`
`CVS Pharmacyis registered to do business in Mississippi and has been since
`
`at least 1997.
`
`87.|CVS Pharmacy maybe served throughits registered agent: The Corporation
`
`Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
`
`19801.
`
`88. Defendant Caremark Rx, L.L.C.is a Delawarelimitedliability company
`
`and an immediateor indirect parent of many subsidiaries, including pharmacy benefit
`
`management and mail ordersubsidiaries that engaged in theactivitiesin Mississippithat
`
`gaverise to this Second Amended Complaint.
`
`89.
`
`Caremark Rx, L.L.C.
`
`is a wholly owned subsidiary of Defendant CVS
`
`Pharmacy andits principalplace of businessis at the same location as CVS Pharmacy and
`
`CVSHealth.
`
`90.
`
`Caremark Rx, L.L.C. may be served through its registered agent: The
`
`Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington,
`
`Delaware 19801.
`
`91.
`
`During therelevant time period, Caremark Rx, L.L.C. provided PBM and
`
`mail order pharmacy services in Mississippi that gaverise to the Insulin Pricing Scheme,
`
`which damageddiabetic Mississippians andtheState