Price 'scheme' lawsuit targets CVS, Express Scripts as well as Novo, Lilly, Sanofi

Justice statue with sword and scales
Four individual plaintiffs were joined by the Type 1 Diabetes Defense Foundation, a nonprofit group that supports patients with Type 1 diabetes, in a suit alleging violations of ERISA, the Employee Retirement Income Security Act.

Another legal salvo has been fired against top insulin makers, accusing them of colluding on prices, but this class action suit also targets pharmacy benefit managers CVS, Express Scripts and UnitedHealth’s OptumRx, claiming they were part of the alleged scheme.

The lawsuit was filed in federal court in New Jersey last week, and four individual plaintiffs were joined by the Type 1 Diabetes Defense Foundation, a nonprofit group that supports patients with Type 1 diabetes. The suit alleges violations of ERISA, the Employee Retirement Income Security Act.

The suit alleges the drugmakers significantly ratcheted up their list prices on their insulins, raising them in lockstep with one another, then shared the additional revenues with the PBMs through rebates.

Free Daily Newsletter

Like this story? Subscribe to FiercePharma!

Biopharma is a fast-growing world where big ideas come along daily. Our subscribers rely on FiercePharma as their must-read source for the latest news, analysis and data on drugs and the companies that make them. Sign up today to get pharma news and updates delivered to your inbox and read on the go.

"The skyrocketing cost of insulin cannot be explained away with typical drug company rationalizations for high costs," the 300-plus page lawsuit reads. "Instead, the increased list prices are the result of a scheme and enterprise among the three dominant drug manufacturers of insulin … and the three largest Pharmacy Benefit Managers, CVS Health, Express Scripts, and OptumRx." 

CVS, Sanofi and Novo all denied the allegations to Bloomberg BNA, which first reported the lawsuit, while OptumRX and Eli Lilly didn’t respond. A spokesperson for CVS told the news service the allegations had no merit and were “built on a false premise.”

This is at least the third suit to offer some variation on this theme. A lawsuit was filed in January against Sanofi, Novo Nordisk and Eli Lilly and mentioned PBMs but did not name any as plaintiffs.

RELATED: Sanofi, Novo and Lilly face class action over 'astounding' insulin price hikes

It said the drugmakers joined in an “arms race” to raise list prices of their meds, allowing them to increase the size of the percent discount in prices offered to PBMs to help them win favorable formulary positioning. But it left those paying their own insulin costs with “crushing” out-of-pocket expenses, it alleged.

RELATED: Amid insulin market scrutiny, Novo faces class action alleging 'collusive price fixing'

That suit followed a class action against Novo Nordisk for alleged “collusive price fixing,” which the Danish drugmaker also has denied.

The legal volcano erupted after Sen. Bernie Sanders and Rep. Elijah Cummings asked the Justice Department and Federal Trade Commission to look into whether Lilly, Novo and Sanofi have been colluding on price increases. They pointed out that price hikes by the companies often occurred at essentially the same time that they had been reported in the media.

“Not only have these pharmaceutical companies raised insulin prices significantly—sometimes by double digits overnight—in many instances the prices have apparently increased in tandem,” their letter reads.

Suggested Articles

FDA officials say Novartis took too long to launch a formal probe into allegations of Zolgensma data manipulation.

Should Johnson & Johnson owe billions to fix Oklahoma's opioid crisis? After weeks of trial testimony, a judge will have his say Monday afternoon.

After Endo and Allergan agreed to settle with two Ohio counties on opioid charges this week, the state’s AG has a message: You’re not off the hook.