March 2025 Update: Big Pharma and the FTC Battle Over Insulin Prices and Constitutional Rights
The legal fight over the high cost of insulin, a life-saving drug for millions of Americans, has continued to intensify.
The three major players in the pharmaceutical benefit management (PBM) industry, CVS, Cigna, and UnitedHealth, are parties to a suit filed the Federal Trade Commission (FTC). The core of the controversy involves allegations of inflating insulin prices, and how the U.S. Constitution should apply.
FTC Allegations
In September, the FTC filed suit against the PBM arms of these companies—Caremark (CVS), Express Scripts (Cigna), and Optum Rx (UnitedHealth). The lawsuit claims their practices with drug manufacturers have driven up the price of insulin, burdening patients who rely on the drug to survive. The case is being heard in the FTC’s in-house administrative court, which operates differently from standard federal courts.
The FTC argues that the PBMs’ negotiating tactics, such as demanding rebates and discounts in exchange for favorable placement on drug formularies, incentivize drugmakers to raise prices and limit access to less expensive alternatives. Critics argue this system harms consumers, particularly those already struggling with high healthcare costs. The FTC’s move is part of a larger agenda of scrutiny of PBMs, which control an estimated 80% of U.S. prescriptions.
Recently, these PBMs sought to recuse FTC Chair Lena Khan and Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter from the case, citing a history of alleged bias against PBMs for these anticompetitive practices. The case was expected to be heard and decided by an FTC administrative law judge, which could then be appealed to the full commission, or to any of the circuit courts.
However, on March 18th, President Donald Trump fired these commissioners from the FTC as a part of the recently-created Department of Government Efficiency (DOGE) intensifying efforts to exert greater control over independent government agencies. The previous day, Lena Khan was removed from office and replaced by current FTC Chair Andrew Ferguson, the chosen candidate of President Trump.
Multi-District Litigation (MDL) Lawsuits
Additionally, in late 2023, lawsuits against insulin manufacturers and PBMs consolidated into a multi-district litigation (MDL) case pending 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. The MDL establishes three litigation tracks:
- Self-Funded Payer Track- This track includes individual actions brought by self-funded payers or groups thereof. Entities such as local governments (counties, cities, schools), unions, and both for-profit and non-profit organizations that fund their own health plans and cover prescription drug costs for their members fall under this category. These plaintiffs allege that insulin manufacturers and pharmacy benefit managers (PBMs) conspired to artificially inflate insulin prices, leading to increased expenses for their health plans
- State Attorney General Track- This track encompasses lawsuits filed by state attorneys general on behalf of their respective states. These legal actions assert that the inflated insulin pricing schemes have violated state consumer protection laws, resulting in significant financial harm to state-funded healthcare programs and residents.
- Third-Party Payer Class Track- This track involves putative class actions initiated on behalf of third-party payers, such as insurance companies and other entities that reimburse for prescription drugs. These class actions claim that the defendants’ pricing strategies have unjustly enriched them at the expense of third-party payers, who have borne the inflated costs of insulin.
These tracks aim to address the injustices of the insulin pricing scheme by seeking:
- Injunctive relief– to halt predatory pricing practices and protect self-funded plans and their members from further harm.
- Reimbursement– for those who have overpaid due to artificially inflated insulin prices.
- Seizure of illicit revenues– amassed by PBMs and manufacturers.
- Punitive damages– to deter similar misconduct in the future.
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.
Generally, 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 impacted financially.
The outcome of these lawsuits will have far-reaching implications—not just for the PBMs and the FTC, but for millions of Americans who rely on affordable medications. If the PBMs succeed in their constitutional challenge, it could reshape how regulatory agencies pursue enforcement actions in the future.
On the other hand, if the FTC prevails, it could set a precedent for stricter oversight of PBMs and potentially bring relief to millions of patients burdened by high drug costs.
The state of insulin, as well as other prescription pricing are 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 Herd Law Firm at 713-955-3699 or charles.herd@herdlawfirm.com for more information about filing a claim!
3/21/2024
Link to CVS, ExpressScripts, and Optum Rx Complaint v. FTC.
Image Source: Unsplash
