The Insulin Pricing Scheme alleged in Plaintiffs' complaint explains how PBMs sell exclusionary or preferential access to their formularies in exchange for a cut of rebates and other fees paid by the drug manufacturers to the PBMs. Formularies are ranked lists of drugs that health insurers rely upon to determine how much of their members' drug costs they will cover. Manufacturers' sales depend on access to these enormous purchaser pools for their profits. Although the PBMs claim the rebates and other payments lower the cost of insulin, in fact, this is misleading. The rebates and other payments decrease the cost of insulin for the PBMs and the insurers with whom the rebates are shared, but drive up the cost for consumers, whose pre-deductible or coinsurance payments at the pharmacy point-of-sale are based on the unrebated "list" price.The PBMs and manufacturers game the system. Instead of competing on price for access to the PBMs' formularies, the manufacturers compete based on the amount of the rebate and other fees that they pay to the PBMs. To prevent the rebates and other fees—and the wasteful transactional costs created by an increasingly convoluted system of payments—from cutting into their profits, the manufacturers raise what they call the "list" price of insulin. Meanwhile, considerable rebates to PBMs maintain at a steady point the "net" price actually realized by the manufacturers. The higher the "list" price, the higher the rebate and other fees, and the larger the profit to the PBMs. The result is a vicious cycle of "list" price increases by manufacturers, vying to win the favor of the PBMs. Consumers with out-of-pocket payment obligations, a large and growing population, are charged an amount based upon the artificially inflated "list" price. This includes the uninsured and people in a variety of types of health plans with co-insurance, co-payment, and high-deductible requirements.
Plaintiffs hired Keller Rohrback not only to make sure the PBMs are held accountable for their role in driving up insulin prices, but also to ensure that all types of plan participants are represented and their claims asserted. For example, the scheme affects participants in both ACA and employer-sponsored plans. Most employer-sponsored welfare benefit plans are governed by the Employee Retirement Income Security Act of 1974 ("ERISA")—which is why Plaintiffs in this action have pleaded claims under ERISA in addition to the other federal claims available to the ERISA Class under the Racketeer Influenced and Corrupt Organizations Act ("RICO") and the Sherman antitrust act. Plaintiffs also have asserted claims on behalf of the uninsured, a Medicare Class, and a class of ACA and state exchange, private, and employer plans that are not covered by ERISA. This class structure is significant because it aligns the injured parties with the types of plans they have and the types of claims they can assert, including state consumer protection laws and common law claims for non-ERISA plans and the uninsured.Finally, Plaintiffs' complaint seeks both monetary and injunctive relief on behalf of the Classes. As in two other recently filed insulin cases, Plaintiffs are requesting remedies that would refund their overpayments and force Defendants to disgorge their ill-gotten gains. Critically, the injunctive relief that is unique to the Boss case would impose disclosure requirements going forward that will increase transparency in a market where a hidden dual pricing system has driven insulin prices through the roof—at severe financial and physical costs to users and purchasers of insulin. Disclosure of this information will make it more difficult for the Defendants to manipulate the cost of insulin in the future, should they attempt to replace the current system with some other scheme. Keller Rohrback looks forward to litigating this case and working with the other plaintiffs and their counsel who have filed similar cases to hold all responsible entities accountable and pursue all available claims. Keller Rohrback L.L.P. has decades of experience helping consumers and insureds fight back against fraud and abuse. Keller Rohrback L.L.P. serves as lead and co-lead counsel in class action lawsuits throughout the country, including actions asserting RICO, ERISA, and consumer claims against PBMs. With offices in New York, Seattle, Phoenix, Ronan, Oakland, and Santa Barbara, our Complex Litigation Group is proud to offer its expertise to clients nationwide. Our trial lawyers have obtained judgments and settlements on behalf of clients in excess of eighteen billion dollars. If you purchase prescription insulin produced by any of the above-listed manufacturers, you may be paying artificially inflated and anti-competitive prices. Please contact an attorney to learn more about whether you too have been subject to unlawful pricing. Call 800.776.6044 or email firstname.lastname@example.org. Attorney Advertising. Prior results do not guarantee a similar outcome. Not licensed to practice law in all states. Please refer to our website for details.