Philadelphia on Tuesday filed suit against drug manufacturers Eli Lilly, Novo Nordisk, and Sanofi, along with several pharmacy benefit managers, joining a nationwide multidistrict litigation in New Jersey federal court accusing the companies of unlawfully inflating the price of insulin.
The city said its lawsuit is part of the Insulin Pricing Litigation pending in the U.S. District Court for the District of New Jersey. More than 550 self-funded payers, including state and local governments, unions, and private employers, have already joined the consolidated proceedings, Philadelphia announced.
According to the city, the alleged price inflation has driven up healthcare costs for Philadelphia, which provides health benefits for more than 30,000 employees and others. The city estimates that about 14 percent of its adult population has diabetes, making access to affordable insulin a public health concern.
“No one should have to worry whether they will have to go without life-saving medication due to high costs,” Mayor Cherelle L. Parker said in a statement. “As mayor, I’m working to ensure that all residents of Philadelphia have access to what they need to live a healthy life, and we’ll continue to hold the companies responsible for delivering health services to the highest standard.”
The complaint alleges that Eli Lilly, Novo Nordisk, and Sanofi manufacture nearly all insulin and other diabetes medications sold in the United States and accounted for roughly 96 percent of global diabetes drug revenues in 2020.
Philadelphia also named pharmacy benefit managers CVS Caremark and OptumRx, accusing them of conspiring with the manufacturers to “dictate the availability and price” of insulin across most of the U.S. market.
PBMs administer prescription drug benefits and maintain approved drug lists that determine which medications are covered by insurers and payers, including the city, according to the complaint.
The lawsuit alleges that insulin list prices have risen sharply over the past two decades despite declining production costs. Insulin that cost about $20 per vial in the 1990s and as little as $2 per vial to manufacture today now sells for between $300 and more than $700, the city said.
Philadelphia further alleges that the manufacturers raised insulin prices in tandem, often within days of one another, and that PBMs benefited from higher list prices because their fees and rebates are calculated as a percentage of those prices.
The PBMs allegedly used their market power, including the threat of excluding drugs from coverage lists, to extract larger rebates and fees from manufacturers. Philadelphia said PBMs control more than 80 percent of prescription drug benefits for more than 270 million Americans.
“Instead of working to make essential drugs like insulin accessible to the people who 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. She said the city is seeking to recover damages and hold the defendants accountable for alleged fraudulent conduct.
The city alleges violations of the federal Racketeer Influenced and Corrupt Organizations Act and Pennsylvania’s Unfair Trade Practices Act. It seeks compensatory and punitive damages, as well as injunctive relief barring the alleged pricing scheme.
Eli Lilly called the claims “baseless,” saying in a statement that prior insulin pricing cases have either been dropped, failed to gain class certification, or settled without payments. Novo Nordisk said it plans to vigorously defend the lawsuit. Sanofi said its pricing practices comply with the law and that it is committed to helping patients access medications at the lowest possible cost.
CVS Caremark said drug manufacturers set insulin prices and denied playing any role in determining those prices. OptumRx said the lawsuit misunderstands drug pricing and said it has helped lower insulin costs for patients. UnitedHealth Group Inc. did not respond to a request for comment.
Philadelphia is represented by counsel from the City of Philadelphia Law Department and multiple private law firms. Counsel information for the defendants was not available Tuesday.
The cases are City of Philadelphia, Pennsylvania v. Eli Lilly & Co. et al., Case No. 2:25-cv-18926, and In re: Insulin Pricing Litigation, Case No. 2:23-md-03080, in the U.S. District Court for the District of New Jersey.
