Pharmacies may have a better chance to win racketeering lawsuits against other insulin supply-chain players than health plans or patients do.
U.S. District Judge Brian Martinotti recently issued two rulings that let pharmacies, or “direct purchaser” plaintiffs, move ahead with claims against pharmacy benefit managers that were based on the federal Racketeer Influenced and Corrupt Organizations Act, but he dismissed similar claims brought by union-sponsored health plans and other health plans against the PBMs and the insulin makers, and against makers of the new GLP-1 agonist weight-loss drugs, such as Wegovy and Mounjaro.
Martinnoti is overseeing a big wave of insulin and GLP-1 lawsuits as the judge in charge of a “multi district litigation” proceeding consolidated in the U.S. District Court for New Jersey.
The cases: The list of defendants involved in the new ruling on the health plans’ claims includes Sanofi, Eli Lilly and Novo Nordisk and the big PBMs — Optum Rx, Caremark and Express Scripts.
The list of defendants in the ruling on the pharmacies’ claims includes the PBMs.
The plaintiffs in both the health plan cases and the pharmacy cases have accused the defendants of engaging in practices such as bribery and mail fraud to influence the cost of insulin and placement on health plans’ formularies.
The rulings: The judge did not rule on the merits of the plaintiffs’ allegations, but he ruled that, if the pharmacies’ allegations were true, they would could create valid RICO claims.
The pharmacies involved in the direct purchaser ruling assigned their claims to other parties. One question is whether the parties could stay in court, if they were not directly injured.
The plaintiffs presented cases indicating that a party must be directly injured to bring a RICO claim.
But “the court is unpersuaded by the unpublished, out-of-circuit cases defendants rely on,” Martinotti wrote in the opinion explaining his ruling. He said he was relying on another court ruling indicating that RICO claims may be assigned.
Reactions: Optum Rx, an arm of UnitedHealth, said in a statement that, for many years, it “has aggressively and successfully negotiated with drug manufacturers and taken additional actions to lower prescription insulin costs for our health plan customers and their members.”
Because of those negotiations, the members “now pay an average of less than $18 per month for insulin,” the company said. “PBMs, like Optum Rx, are the key counterweight to pharmaceutical companies’ otherwise unchecked monopoly power to set and raise drug prices.”
Evernorth, the arm of Cigna in charge of the Express Scripts PBM, did not comment on the current rulings but pointed to past arguments it has made that Express Scripts has fought hard to hold down what people with diabetes pay for their medications.
Caremark and representatives for the plaintiffs could not immediately be reached for comment.