Missouri AG files lawsuit against 19 pharmacy companies for alleged insulin pricing scheme
Cameron Montemayor
JEFFERSON CITY, Mo., (News-Press NOW) — A group of nearly 20 pharmacy companies have been named in a lawsuit filed by Missouri’s attorney general for alleged insulin price manipulation and fraud.
Missouri AG Catherine Hanaway announced her office filed a lawsuit in St. Louis County Circuit Court on Jan. 15 against 19 different Pharmacy Benefit Manager companies and drug manufacturers operating in Missouri.
PBMs are a third-party administrator or company that acts as an intermediary between drug manufacturers, pharmacies, and insurance plans, negotiating prices, managing prescription drug benefits, processing claims and creating drug formularies to control drug spending and negotiate discounts and rebates.
The lawsuit claims that for years, PBMs and manufacturers have manipulated Missouri’s health care markets, resulting in skyrocketing prices of life-sustaining insulin medication.
“At a time when health care costs continue to soar, we are taking a stand against insulin price manipulation and fraud,” said Attorney General Hanaway said in a news release. “It is quite clear that the health care administration conglomerates do not want the prices for diabetes medications to go down, choosing profit over affordable health care for people at risk. Missourians deserve a fair and just marketplace and we demand nothing less.”
According to the lawsuit, the scheme has led to rapid price increases for life-sustaining drugs for uninsured Missouri residents with diabetes over the past fifteen years. In Missouri, nearly 450,000 Missouri residents are uninsured, and approximately 18% of those uninsured Missouri residents are diabetic.
Notably, published manufacturing prices in Missouri of $300 to $400 for the same at-issue drugs that were sold in other countries for less than the equivalent of $5 USD. Missouri diabetics rely on the PBMs to achieve the lowest prices for insulin and to construct formularies designed to improve their health and lower costs, only to be deceived with artificially inflated list prices.
“Access to life-sustaining insulin should not be restricted by radical pricing practices that disproportionately harm families,” said Interim Deputy Attorney General Jeremiah Morgan, “PBMs have found a way to game the system for their mutual benefit—the Insulin Pricing Scheme, and consumers have said ‘enough.’”
The Missouri Pharmacy Business Council, a group of independent Missouri pharmacists, issued a statement in response to the lawsuit applauding the state for taking a closer look at the issue.
“This insulin scheme is just one example of broader PBM abuses including opaque pricing, pharmacy steering, lack of transparency, and retaliatory audit practices that harm patients and community pharmacies alike,” a statement from MPBC read.
The suit names 19 defendants, including PBMs and manufacturing defendants:
Evernorth Health, INC. (Formerly Express Scripts Holding Company) (located in St. Louis County);
Express Scripts, Inc. (located in St. Louis County);
Express Scripts Administrators, LLC;
ESI Mail Pharmacy Service, Inc. (located in St. Louis County);
Express Scripts Pharmacy, Inc. (located in St. Louis County);
Medco Health Solutions, Inc.;
CVS Health Corporation;
CVS Pharmacy, Inc.;
Caremark Rx, LLC;
CaremarkPCS Health, LLC;
Caremark, LLC;
UnitedHealth Group, Inc.;
Optum, Inc.;
OptumRx, Inc.;
OptumInsight Life Sciences, Inc.;
OptumInsight, Inc.
Eli Lilly and Company;
Novo Nordisk Inc.; and
Sanofi-Aventis U.S. LLC
At the same time, Missouri lawmakers are also eyeing new legislation to regulate PBMs. Dual legislation introduced in both the Missouri House and Senate by Sen. Jill Carter (R-32) and Rep. John Hewkin (R-120) would modify definitions and regulations to address transparency and pricing disparities tied to pharmacy benefit managers, or PBMs.
More than 20 states introduced legislation during the 2024 session to regulate pharmacy benefit managers.