December 23, 2025
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Philadelphia is suing several pharmacy benefit managers and insulin manufacturers for allegedly inflating insulin prices while falsely claiming they were working to lower them.
The city of Philadelphia is suing several large drug companies over an alleged pricing scheme that has driven up the cost of insulin.
The lawsuit, filed Tuesday in federal court, claims the companies conspired to increase their profit margins and raise the price of insulin while misrepresenting to the public that they were working to lower costs. It names as defendants the pharmacy benefit managers CVS Caremark, Express Scripts and OptumRx, as well as drug manufacturers Eli Lilly, Novo Nordisk and Sanofi.
Philadelphia is one of more than 550 state and local jurisdictions, companies and unions – including Bucks County and the University of Pennsylvania – that run their own insurance plans and have sued these drug manufacturers and pharmacy benefit managers over alleged insulin price-fixing schemes.
California will be the first state to start selling low-cost insulin in January, bypassing pharmaceutical companies and pharmacy benefit managers, which act as middlemen between pharmaceutical companies, health insurance companies and pharmacies in negotiating drug costs.
Alongside other prescription drugs, the price of insulin has skyrocketed over the last 20 years. Insulin was about $20 a vial in the 1990s. Today, it costs $300 to $700 a vial – even though it costs about $2 to make, Philadelphia's lawsuit claims.
"Instead of working to make essential drugs, like insulin, accessible to the people that need them, these companies operated a scheme to drive prices up at the expense of patients and insurers like the City of Philadelphia," City Solicitor Renee Garcia said in a news release.
The pricing scheme has forced the city to overpay for insulin for the 30,000 employees and families covered under its health insurance plan, the lawsuit claims.
About 14% of adults in Philadelphia have diabetes — one of the highest rates in the country, according to the complaint. Insulin helps keep blood sugar under control and prevent diabetes complications.
"Thanks to medications like insulin, Philadelphians suffering from diabetes can live a full, healthy life," Health Commissioner Palak Raval-Nelson said in the news release. "... When people cannot afford their insulin, they frequently go without or cut back, leading to disastrous consequences both for themselves and Philadelphia as a whole."
The city is seeking damages, alleging that the drug companies have violated the Racketeer Influenced and Corrupt Organizations Act and the Pennsylvania Unfair Trade Practices and Consumer Protection Law.
"Novo Nordisk believes that the allegations against it are meritless, and we intend to vigorously defend against these claims," the company said in an emailed statement. "While we will not comment further about pending litigation, we recognize that not all patient situations are the same and we have a number of different insulin affordability offerings available through NovoCare. Importantly, we continually review and revise our offerings as well as work with diverse stakeholders to create solutions for differing patient needs."
CVS Caremark provided an emailed statement reading: "Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture. Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products and we would welcome such an action. Allegations that we play any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit."
The other companies did not immediately reply to requests for comment.
