Law & Order Diabetes

Law & Order Diabetes

Listen intellectual property lawsuits are part of the diabetes device world. These suits are as common as cold and windy days in the city of Chicago. In many respects for device start-ups an IP suit is almost a rite of passage, a sign that the company has arrived. As we have said to these start-ups you know when your considered a threat when one of the big boys sues you.

Lately however this wacky world of ours is having all sorts of legal issues well beyond the normal IP stuff. As we noted over the weekend Novo Nordisk (NYSE: NVO) settled an investigation for various sales shenanigans, something that unfortunately is rather common in this wacky world. Our wine drinking friends in France are another insulin maker who got caught playing fast and loss with the rules.

Today two additional legal items came to our attention which made us wonder if we should begin publishing some sort of police blotter. First news came that Lilly (NYSE: LLY) has received civil investigative demands from two state attorney generals in regards to, what else, insulin pricing.  Per a post on the MarketWatch web site;

“Eli Lilly & Co. LLY, -0.13% has received civil investigative demands related to its insulin prices from the attorney generals in Washington State and New Mexico, according to a 10-Q financial filing. The Washington State AG’s office demand has to do with insulin prices as well as “our relationships with pharmacy benefit managers,” industry middlemen that negotiate drug prices, while the demand from the New Mexico AG’s office asked about insulin pricing, according to the 10-Q. Eli Lilly is cooperating with both investigations, it said.”

Next comes word from Alere which was recently acquired by Abbott (NYSE: ABT) that a federal judge upheld a ban imposed on its Arriva Medical diabetes division by the Centers for Medicare & Medicaid Services. This ban bars the unit from receiving government insurance reimbursement and steams from CMS stating that the unit submitted claims from 211 patients who just happen to be deceased. Oops.

A couple of quick thoughts here. First, we suspect that Lilly won’t be the only insulin maker receiving calls from attorney generals. Nor do we expect any of these investigations to have any material impact on what a patient pays for insulin. While we would like these investigations to shed more transparency on things like discounts and rebates we aren’t holding our breath here either.  Just as no one wants to see how law or sausage is made nor do they want to wade into the insulin pricing pool. Talk about murky water with lots of germs.

Unfortunately, these legal issues will also reinforce the perception that these companies are nothing but money grubbing criminals who will do anything to make a buck and could care less about patients. A perception that is very close to reality but we digress.

Listen as we noted over the weekend the real world is full of people and companies who will push for an edge even if that means breaking the law. Does anyone seriously believe that Novo was not aware of what was going on and that the people responsible did not do a risk benefit analysis before embarking on the illegal tactics.

Although terms of the settlement were not disclosed our guess is it’s a drop in the bucket compared to the money these illegal tactics generated and will continue to generate. Nor will patients benefit in any noticeable way from this settlement either. Nope the whistle-blower gets a nice commission, the lawyers get their cut and the rest gets spent or pocketed by the states that filed the original lawsuit. Yep as always, the patient gets the short end of the stick.

We see the same scenario playing out when the insulin makers also settle the inevitable lawsuits related to insulin pricing. The states will get their cut, the lawyers will get their cut and the patient once again is told to bend over and enjoy it. Sure, the insulin makers will do a big mea culpa and some stuff to look good but in the end, none of this will have a material impact on what a patient pays for their insulin.

Listen with all the Law & Order franchises going these days, having moved from New York to the great city of Chicago, why not Law & Order Diabetes. Given the way things are going there is plenty of material and Chicago is such a beautiful city. Heck maybe we can get some of the scumbag executives in the device world to make cameos or perhaps get that crusading cardiologist a starring role. Perhaps like the other Law & Order shows the writers can throw in some wins for the little guy, as heaven knows that doesn’t happen in the real world.