The Philadelphia region’s largest health system has sued several drugmakers and pharmacy benefit managers, alleging “concerted efforts” to artificially raise insulin prices that led to greater spending on patient care and the system’s self-insured health plan.
Jefferson Health, which runs 32 hospitals and employs more than 58,000 people, filed its lawsuit on Dec. 30 in a New Jersey federal court.
It’s one of more than 550 lawsuits with similar allegations brought against the defendants, centralized in a multidistrict litigation reaching back to 2023. Recent weeks have brought a wave of such filings from multiple state and local jurisdictions with self-insured health plans, as well as private sector parties like Jefferson.
Defendants in the case include drugmakers Eli Lilly, Novo Nordisk and Sanofi and PBMs CVS Caremark, Express Scripts and OptumRx, as well as their affiliated insurers, pharmacies and rebate-aggregating group purchasing organizations. The former group collectively control 92% of the global diabetes drug market’s volume and 96% of its revenue, while the latter controls more than 80% of the U.S. PBM market, according to Jefferson’s complaint.
Against the historical contrast of the 1990s’ $20 insulin vials and recent years’ $350 price tags, Jefferson alleges the defendants have conducted an “insulin pricing scheme” in which manufacturers set “effectively false” initial list prices.
PBMs adding the drugs to their formularies do so while securing return payments from the manufacturers (i.e., rebates or discounts) and, due to the differing terms of contracts with the various parties, are able to pocket profits alongside drug manufacturers with limited transparency for self-insured plans, according to the lawsuit.
“The Insulin Pricing Scheme thus creates a ‘best of both worlds’ scenario for Defendants,” the lawsuit reads. “The Manufacturers increase their sales and revenues by being favorably placed on formularies, while the PBMs receive a portion of the Manufacturer’s sales through lucrative and secret Manufacturer Payments based on the Manufacturers’ list prices. As the PBMs receive increasing Manufacturer Payments, the Manufacturers simply raise their list prices further.”
Jefferson alleges the defendants’ practices violate the Racketeer Influenced and Corrupt Organizations Act (RICO) and other consumer protection and fair trade laws. Claiming harm from 2011 onward, the system is seeking injunctive relief, restitution for damages, disgorgement or other legal remedies.
CVS Caremark, in an emailed statement, said "pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture. Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products and we would welcome such an action. Allegations that we play any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit.”
Express Scripts, in response to a request for comment, referred to a webpage from 2024 supporting a lawsuit it filed against the Federal Trade Commission, which had floated similar claims around insulin prices.
Fierce Healthcare has also reached out the other named defendants for comment and will update this story with any responses.