UnitedHealthcare Sued by Dozens of Schools Over Price of Insulin

What’s New

Dozens of school districts across multiple states have taken legal action in the U.S. District Court for the District of New Jersey against several pharmaceutical giants, pharmacy benefit managers (PBMs), and UnitedHealthcare, accusing them of orchestrating a scheme to inflate insulin prices.

insulin cost US — The picture shows an ampule of quick-acting insulin lispro taken in Frankfurt, Germany.

AP Photo

At the time of publication, between October 29 and December 18, 35 school districts and three counties have filed suits against the defendants in the U.S. District Court for the District of New Jersey. These suits are part of the 200 districts suing the defendants nationwide. The districts are seeking damages, restitution, and punitive penalties, arguing that the defendants’ actions result in fraud and unjust enrichment.

Newsweek has contacted representatives for Eli Lilly, Novo Nordisk, Sanofi, CVS Caremark, Express Scripts, OptumRx, UnitedHealthcare, and the FTC by email for comment.

Why It Matters

The lawsuits shed light on the growing scrutiny of insulin pricing practices in the United States. Insulin, discovered over a century ago, was originally intended to be affordable. However, today’s prices, which can reach up to $700 per vial, starkly contrast with the original intent of its creators, who sold the patent for $1 to ensure public accessibility, according to one lawsuit filed by Wyoming Public Schools in Michigan.

Many of the lawsuits were filed after December 4 when suspected shooter Luigi Mangione, 26, shot UnitedHealthcare CEO Brian Thomspon in New York City. While Mangione was not a UHC client, he is believed to have been fueled by anger toward the health insurance industry and broader corporate greed as a whole.

What To Know

In addition to UHC, the lawsuits filed in New Jersey name drug manufacturers Eli Lilly, Novo Nordisk, and Sanofi, along with PBMs CVS Caremark, Express Scripts, and UnitedHealth’s OptumRx, as defendants.

The lawsuits allege that these pharmaceutical companies and PBMs collaborated to drive up the prices of insulin, a life-sustaining drug for millions of Americans living with diabetes.

According to the complaints, the cost of some diabetes medications has surged more than tenfold in the past two decades, despite production costs decreasing. The districts say that this price inflation has harmed their employee health plan, which provides prescription drug benefits to staff and retirees.

Central to the complaint is the claim that PBMs, which negotiate drug prices and determine which medications are covered by insurance plans, manipulated the system for profit. The PBMs allegedly required manufacturers to pay large rebates and other fees in exchange for favorable placement on drug formularies (lists of approved medications). These rebates were concealed from payors, like the school districts, creating artificially inflated list prices that were passed on to health plans.

Last month, CVS Health, UnitedHealth Group, and Cigna sued the Federal Trade Commission (FTC), claiming its case against (PBMs) over high insulin prices is unconstitutional.

What People Are Saying

FTC spokesperson Douglas Farrar in a statement to NBC New York on November 19: “It has become fashionable for corporate giants to argue that a 110-year-old federal agency is unconstitutional to distract from business practices that we allege, in the case of PBMS, harm sick patients by forcing them to pay huge sums for life saving medicine. It will not work.”

Andrew Mulcahy, a senior health economist at RAND, in a press release in February: “Insulin prices in the United States have been increasing for many years and are substantially higher than in other middle- and high-income nations.”

Jessica Dobrinsky, a policy analyst at The Cardinal Institute for West Virginia Policy, stated on the institute’s website in 2022 that such caps may create long-term issues by reducing profits available for research and development, ultimately limiting the introduction of new medications. She suggested that easing regulatory burdens and adopting policies like those in Canada—where insulin is available without prescriptions—might be a better approach to address access issues .