Drugmakers, PBMs must jointly face insulin price-fixing lawsuit, judge rules

A lawsuit accusing several drugmakers and pharmacy benefit managers of conspiring to fix prices for insulin can proceed, a Texas judge ruled Sept. 29, marking the first time drugmakers and PBMs will have to collectively defend their role in the rising price of insulin, STAT reported. 

The lawsuit was filed in Harris County, Texas, in 2019 and claims taxpayers were "fraudulently overcharged" for drastic price hikes for insulin, a drug that hasn't changed substantively in many years. 

The lawsuit claims that from 2013 to 2018 Harris County had to pay $27.5 million for insulin due to an alleged pricing scheme involving drug companies and the country's largest PBMs: OptumRx, Express Scripts and CVS Caremark. No previous lawsuits on insulin prices have accused PBMs of collaborating with drugmakers to raise insulin prices, STAT reported. 

"The truth is that both groups of companies have been working together to create an artificial pricing system, and so anyone purchasing insulin is being harmed by this conspiracy by two dominant market actors," Joanne Cicala, an attorney who represents Harris County, told STAT.  

The companies named in the lawsuit face civil racketeering and fraud claims, Ms. Cicala said. 

The lawsuit alleges there was a quid pro quo arrangement between drugamkers and PBMs in which drugmakers would artificially raise prices of insulin to win placement on formularies and make secret payments to PBMs in the form of rebates, fees and discounts. PBMs would separately negotiate with pharmacies to reimburse them at a lower price than what health plans would pay for insulin, and PBMs would pocket the difference, the lawsuit claims. PBMs would also use the inflated prices to profit when selling insulin through their own mail-order pharmacies, STAT reported. 

Novo Nordisk, one of the largest insulin sellers in the U.S., told STAT: "We're disappointed in the court's ruling on Novo Nordisk's motion to dismiss the complaint, as we find the claims to be baseless and wholly without merit … we have a longstanding commitment to supporting patients' access to our medicines. Because this is an ongoing litigation, we cannot comment further." 

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