Oregon’s attorney general is suing six of the nation’s largest pharmaceutical companies and pharmacy benefit managers for conspiring to artificially inflate insulin prices and other critical diabetes medications for years.
Attorney General Dan Rayfield announced the lawsuit on Wednesday against insulin and diabetes medication manufacturers Novo Nordisk, Sanofi and Eli Lilly — the only three remaining manufacturers of insulin in the U.S. — and benefit managers Express Scripts, CVS Caremark and Optum, which control 80% of the pharmacy benefit market in the U.S.
Pharmacy benefit managers manage prescription drug coverage for healthcare plans offered by insurers and employers, including negotiating list prices and helping to select which drugs insurance companies will cover.
In the suit, filed Wednesday in Multnomah County Circuit Court, Rayfield alleges the companies violated Oregon’s Unlawful Trade Practices Act through “misleading conduct and unconscionable practices,” exploiting a highly vulnerable population for at least 15 years. It makes Oregon one of about 20 states so far that have sued drug manufacturers and pharmacy benefit managers in recent years over insulin price fixing.
Roughly 350,000 Oregonians are living with diabetes, according to the suit, and an additional 1.1 million Oregonians have prediabetes. One in four people with diabetes in Oregon earn less than $25,000 per year and disproportionately live in low-income areas.
He accused the drug manufacturers of paying kickback fees to pharmacy benefit managers in exchange for those managers getting select diabetes drugs — including popular GLP-1 drugs a growing number of Americans are using for weight loss — onto lists of drugs to be covered by insurance companies, and then inflating the price of those drugs for years.
He is seeking a court order to stop the alleged price fixing, restitution for customers who’ve been forced to pay unnecessarily high drug costs and an additional $900 million in damages on behalf of Oregon patients.
“The higher the list price, the larger the rebate — and the greater the profit for both sides,” a statement from Rayfield’s office explained.
Rayfield also accused the companies of working together to intentionally exclude from insurance coverage lower-cost insulin manufactured by other drug makers, helping to lock in inflated prices across the U.S. market.
“This is about more than insulin prices — it’s about the crushing cost pressures families are facing and the very real harm that comes when corporations exploit people who have no choice but to pay,” Rayfield said in the statement. “When companies jack up the price of life-saving drugs, they don’t just impact wallets, they exacerbate stress, anxiety and mental health crises for people who are already struggling to make ends meet.”
A 2018 study from BMJ Global Health referenced in the lawsuit found Americans in 2016 paid about 40 times the “reasonable price” for insulin in 2016. A year’s supply of insulin in 2016, accounting for production costs and providing manufacturers a profit, should not have cost more than $133, the researchers found. Instead, the average American paid more than $5,700 for their insulin that year.
A 2024 study from researchers at Yale, Harvard Medical School and King’s College Hospital in London, also referenced in the lawsuit, found that drug makers could sell GLP-1s and other Type 2 diabetes medications for $5 a month and cover production costs and make a profit. Instead, those drugs are sold at an average price of $1,000 per month.
Rayfield plans to file more lawsuits this year against companies involved in unlawful prescription drug pricing practices, according to the statement from his office. Rayfield is actively examining the role of pharmacy benefit managers and other entities in the prescription drug supply chain.
“We are working to bring the cost of prescription drugs down for working families, using the tools we have to hold these powerful companies accountable. Oregonians can expect more action in the near future,” Rayfield said.
Last year he helped to secure a $9.25 million settlement from two testosterone replacement gel manufacturers involved in drug-price fixing and a $39 million, multi-state settlement with generic drug maker Apotex over price fixing.
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