By Jonathan Stempel and Brendan Pierson
(Reuters) -Eli Lilly agreed to provide low-cost insulin to patients and donate free insulin to clinics, to settle a lawsuit by Minnesota that accused the three largest insulin makers of deceptively raising the price of the diabetes treatment.
The settlement filed on Wednesday in a New Jersey federal court calls for Lilly to offer patients in Minnesota who pay out-of-pocket the ability to pay no more than $35 a month for its insulin products.
Patients with insurance can also choose not to use their coverage, and pay the $35 instead.
The settlement, which will be in force for five years, also requires Indianapolis-based Lilly to donate free insulin to 15 clinics serving Minnesotans who might otherwise struggle to afford the life-sustaining treatment.
"This landmark settlement ensures that insulin will be affordable and accessible to every Minnesotan who needs it," Minnesota Attorney General Keith Ellison said in a statement.
Lilly in a statement said: "The agreement builds on our longstanding and industry leading efforts to close gaps in the U.S. healthcare system and expand access to affordable insulin."
Minnesota first filed the lawsuit in 2018. It remains pending against the other defendants - Danish drugmaker Novo Nordisk (NYSE:NVO) and France's Sanofi (NASDAQ:SNY).
Minnesota said the three drugmakers fraudulently set artificially high list prices for their products, while offering rebates to pharmacy benefit managers (PBMs) in exchange for their covering the drug on behalf of health plans.
While insured patients generally pay a fraction of the list price, uninsured patients were left paying much higher prices, Minnesota said.
Insulin is vital for patients with type 1 diabetes to control their blood sugar, and for some patients with the more common type 2 diabetes.
Lilly said last March it would slash insulin prices and make it available to many patients for $25 or $35, following pressure from President Joe Biden, lawmakers and advocacy groups over skyrocketing costs.
A survey released last July by U.S. Senator Elizabeth Warren found that many patients nevertheless were still being charged hundreds of dollars for treatments.
Around 8.4 million of the 37 million people in the United States with diabetes use insulin, according to the American Diabetes Association