Dover Sues Insulin Makers and PBMs, Alleges RICO Scheme Driving Up Drug Prices
America ı By Ahmed Boughalleb
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Manufacturing conglomerate Dover Corp. has filed a federal lawsuit in Illinois accusing major insulin manufacturers and pharmacy benefit managers of running an illegal pricing scheme that allegedly inflated insulin costs for more than two decades.
In a complaint filed Tuesday in the Northern District of Illinois, Dover claims Eli Lilly, Novo Nordisk, Sanofi, and several large pharmacy benefit managers, including CVS Health Corp., coordinated to raise insulin list prices while secretly sharing a portion of those inflated revenues in exchange for preferential placement on drug formularies.
According to Dover, the nation’s three dominant insulin manufacturers increased prices in parallel over many years, while channeling payments to PBMs under labels such as rebates, discounts, and administrative fees. Dover alleges these payments functioned as quid-pro-quo compensation for favorable formulary status.
“By whatever name,” the complaint states, the payments were tied to inflated list prices and rewarded PBMs for prioritizing higher-priced insulin products that generated greater profits.
The alleged arrangement, Dover says, benefits both manufacturers and PBMs. Formulary decisions are allegedly driven by which products yield the highest rebate revenue, encouraging manufacturers to continue raising prices while PBMs receive larger payments tied to those increases.
Dover contends the pricing structure affects every health-plan sponsor because insulin reimbursement rates are linked to manufacturers’ list prices. The company claims it has paid millions of dollars in excess insulin costs since 2002 as a result of the alleged conduct.
The lawsuit asserts violations of the federal Racketeer Influenced and Corrupt Organizations Act, as well as Illinois consumer protection statutes and common law. Dover seeks treble damages, punitive damages, restitution, interest, and injunctive relief barring the defendants from continuing the alleged practices.
Similar claims have recently surfaced elsewhere. Indiana’s attorney general filed a state court action earlier this month targeting Eli Lilly, while officials in Hamilton County, Ohio, lodged comparable allegations in federal court on Tuesday.
In contrast, a New Jersey federal judge overseeing a case brought by Minnesota’s attorney general allowed most claims to proceed but dismissed RICO allegations, ruling that states cannot seek injunctive relief under the federal statute on behalf of residents.
Eli Lilly criticized Dover’s lawsuit in a statement Wednesday, saying prior insulin pricing cases have failed when tested in court.
“In the only three cases where insulin pricing allegations have been put to their proof, plaintiffs either dropped their claims, lost class certification, or settled for no money,” the company said. Lilly added that it has worked to reduce insulin out-of-pocket costs and argued that rebate structures benefit parties other than patients.
Novo Nordisk said Dover’s claims lack merit and that the company plans to defend itself vigorously. Sanofi said its pricing practices comply with the law and emphasized that negotiated rebates are not always passed through to patients, contributing to rising out-of-pocket costs despite declining net prices.
CVS Health rejected the allegations, stating that drug manufacturers alone determine list prices and that nothing in PBM agreements prevents companies from lowering insulin prices.
Dover declined to comment on the lawsuit. Other defendants did not immediately respond to requests for comment.
Dover is represented by counsel from Levin Papantonio Proctor Buchanan O’Brien Barr & Mougey, Kozyak Tropin & Throckmorton, Seeger Weiss, and Baron & Budd.
The case is Dover Corp. v. Eli Lilly & Co. et al., case number 1:26-cv-00390, in the U.S. District Court for the Northern District of Illinois.
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