Philadelphia-based Jefferson Health and Thomas Jefferson University filed a federal lawsuit Dec. 30 alleging that three insulin manufacturers and the nation’s largest pharmacy benefit managers conspired to inflate insulin prices, costing the health system millions.
The complaint, filed in the District of New Jersey, claims Eli Lilly, Novo Nordisk and Sanofi, which the plaintiffs claim control 92% of the global diabetes drug market by volume, coordinated with CVS Caremark, Express Scripts and OptumRx, which collectively manage more than 80% of U.S. prescriptions, to raise list prices for insulin while pocketing secret rebates.
Jefferson Health alleged it was overcharged for insulin purchased for its self-insured health plan and for use in its hospitals and pharmacies. The system is the largest in the Philadelphia region, by licensed beds.
According to the complaint, the price of insulin now ranges from $300 to more than $700 per vial — up from $20 in the 1990s — despite manufacturing costs as low as $2. The system said these increases were not driven by innovation or demand, but by a pricing scheme that inflated costs for payers and patients.
In statements to Becker’s, several defendants said they intend to contest the suit. Lilly said it has reduced list prices and capped monthly out-of-pocket costs at $35 for all insulins, adding that “in the only three cases where insulin pricing allegations have been put to their proof,” plaintiffs either dropped the case, lost class action status or settled for no money. Novo Nordisk called the allegations “meritless,” and Sanofi said its pricing practices comply with the law, adding that “savings negotiated by health insurance companies and PBMs through rebates are not consistently passed through to patients.”
CVS Caremark said, “pharmaceutical companies alone are responsible for the prices they set,” and Optum Rx called the lawsuit “baseless,” noting its members now pay an average of less than $18 per month for insulin.
The plaintiffs are seeking injunctive relief, damages and disgorgement under RICO and consumer protection laws.
The case comes as other states pursue similar litigation. On Jan. 7, Oregon Attorney General Dan Rayfield filed a $900 million lawsuit against the same manufacturers and PBMs, alleging a coordinated scheme to inflate insulin prices that harmed low-income and uninsured residents. The complaint, filed in Multnomah County Circuit Court, claims patients were forced to ration insulin, reuse needles or skip meals to afford care.
Indiana Attorney General Todd Rokita also filed suit against Eli Lilly, accusing the company of deceptive practices that contributed to inflated insulin costs. The state is seeking injunctive relief, damages and penalties. Lilly called the Indiana lawsuit “wasteful” and reiterated its recent affordability efforts.
