Express Scripts and Caremark Challenge Hawaii PBM Lawsuit Ruling in Ongoing Legal Battle

Pharmacy benefit managers (PBMs) Express Scripts and CVS Caremark are appealing a federal judge’s decision to move Hawaii’s lawsuit against them to state court, arguing that the complex case involving prescription drug pricing should stay under federal jurisdiction.

Hawaii joined the growing number of states challenging major pharmacy benefit managers (PBMs) in October 2023, when Attorney General Anne Lopez filed suit against the nation’s largest PBMs, alleging the PBMs collectively manipulated the cost for life-saving drugs such as insulin in a coordinated price-fixing strategy. The lawsuit targets Express Scripts, CVS Caremark, and OptumRx—three companies that collectively control over 80% of the prescription drug market.

The suit and allegations are part a trend of heightened national scrutiny towards PBM practices, with many states and federal agencies questioning whether these middlemen are fulfilling their intended role of reducing drug costs, or instead have intentionally increased the price and scarcity of vital drugs to the detriment of millions of Americans. 

However, the PBMs are “asking the appeals court to reverse federal District Judge Leslie Kobayashi’s order sending the case back to Hawaii state court.” Express Scripts, Caremark and Optum Rx are attempting to move multiple cases from states and local municipalities “to federal court and consolidate them into multidistrict litigation (MDL) based out of the U.S. District Court for the District of New Jersey.” 

The Jurisdictional Dispute

The core of the current legal dispute centers on if the case should be handled by a Hawaiian state court or federal court. This question is particularly significant in PBM litigation, as these companies often work with both state and federal healthcare programs, and so could be considered “federal contractors”. The defendants often prefer federal court strategically, due to potentially more favorable precedents for the PBMs regarding pharmaceutical industry regulation, and the complexity of interstate commerce.

Judge Kobayashi initially ruled that the case belonged in state court, as it deals specifically with state health plan issues. However, with Express Scripts and Caremark fighting this decision, Hawaii has continued to emphasize that the defendants cannot argue for federal jurisdiction when the state has explicitly excluded federal health programs from its claims.

Broader Context of PBM Litigation

Meanwhile, Express Scripts has been engaged in its own legal battles with federal regulators. In September 2024, Express Scripts sued the Federal Trade Commission (FTC) over a report that found the six largest PBMs control about 95% of US prescriptions and use their dominance to inflate drug prices. The company has demanded that the FTC retract what it calls a misleading and harmful report about the PBM industry.

“The FTC stands by our study,” Douglas Farrar, FTC spokesperson told Formulary Watch. “Just three companies control nearly 80% of the market that millions of Americans must use to purchase necessary drugs at high costs. This is a complicated and opaque market, and the FTC is committed to using its clear authority to help the public and policymakers understand it.

The jurisdictional outcome could significantly impact how the case is handled going forward. State courts may be more sympathetic to arguments about protecting local consumers and state healthcare programs, while federal courts might focus more on interstate commerce and federal regulatory frameworks.

This case is part of a broader national conversation about PBM practices, pricing transparency, and the role these middlemen play in the prescription drug supply chain. Regardless of where the case is ultimately heard, it further encourages ongoing policy discussions about how PBMs balance serving their patients’ medical needs with the financial interests of their shareholders.

Multi-District Litigation (MDL) Lawsuits 

In late 2023, lawsuits against drug manufacturers and PBMs similar to this Hawaii case consolidated into a multi-district litigation (MDL) case in the United States District Court of New Jersey (Case 2:23-md-03080-BRM-RLS). This is a federal case, so any group or individual in the United States with a qualifying claim may join the lawsuit.

Who Can Join?

The burden of exploitative insulin pricing falls heavily on self-funded healthcare plans and their members/patients, including self-funded U.S. government entities and unions at the state, county, and city levels. These groups (and the individuals in them) have a unique opportunity to hold insulin manufacturers and PBMs accountable by joining the litigation.

You may qualify if you:

• Are a diabetic patient (or are an insurer of one) who has paid for insulin out-of-pocket or through insurance;
• Are part of a self-funded health plan that has incurred increased costs due to high insulin prices; or
• Represent a health plan or organization whose inflated prices have been financially impacted

The state of insulin, as well as other prescription pricing, is undergoing significant changes due to these legal challenges and regulatory interventions. If you represent an affected entity or want to learn more about filing a claim, reach out to our team here at the Herd Law Firm, PLLC at 713-955-3699 or Charles.Herd@HerdLawGirm.com for more information!

Time is critical. Statutes of limitations may limit your ability to seek compensation, and evidence preservation is essential for building the strongest possible case.

We at the Herd Law Firm, PLLC, we support every man, woman, and child exposed to contaminants or cost-inflated medications and believe you deserve quality, attentive legal representation. We are proud to be able to aid our veterans, their families, and others exposed to toxins in seeking restitution for their injuries.

9/5/2025