Howard County schools sue, alleging insulin pricing scheme

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The Howard County Board of Education has joined the nationwide wave of lawsuits seeking to address the price of the diabetes drug insulin, which has skyrocketed in recent decades despite few changes to the drug itself.

The school board on Friday sued a group of drug manufacturers and pharmacy benefit managers, including Eli Lilly, Sanofi, Novo Nordisk, UnitedHealth Group and several CVS subsidiaries, alleging a racketeering scheme to illegally raise the price of the drug.

The Howard County Public School System offers an employee health insurance plan with pharmacy benefits, meaning it pays a portion of employees’ drug costs. Since 2010, the lawsuit states, HCPSS has overpaid by millions of dollars for insulin.

“These price increases do not derive from the rising cost of goods, production costs, investment in research and development, or competitive market forces,” the complaint states. “Instead, Defendants engineered them to exponentially increase their profits at the expense of payors like Plaintiff.”

Individuals, government agencies, unions and others around the country have filed hundreds of lawsuits against Big Pharma companies in recent years seeking to reform a system they say drives up the price of drugs without adding any value to the consumer. In Maryland, Baltimore City and Baltimore City Schools have each filed similar lawsuits in the past 16 months; Washington County sued in late 2023.

A case against Eli Lilly and others, in which several states are plaintiffs, is ongoing in federal court in New Jersey. In that case, Lilly had agreed to a $13.5 million settlement, but it was called off in April 2024. In September, in the final months of Joe Biden’s presidency, the Federal Trade Commission also sued the top three pharmacy benefit managers.

HCPSS brings two causes of action under the Racketeer Influenced and Corrupt Organizations Act, or RICO. It also sued for common law fraud, unjust enrichment and violations of the Maryland Consumer Protection Act. It is represented by Matt Legg of Brockstedt Mandalas Federico in Baltimore, as well as Darren Burns of Carney Kelehan in Annapolis and Ben Widlanski of Kozyak Tropin & Throckmorton in Florida.

Legg said he anticipates the HCPSS lawsuit will be consolidated with the multi-state litigation ongoing in New Jersey.

Pharmacy benefit managers, which each maintain “formularies,” or a list of approved drugs, are designed to drive down prices through competition and the threat of de-listing. The lawsuit alleges drug manufacturers collude to drive up the price of insulin and essentially bribe the PBMs to include their drugs in the formularies.

“Even if temporary reductions in Howard County BOE’s costs for the at-issue drugs occur from time to time, those costs still remain significantly higher than costs that would have resulted from a transparent exchange in a free and open market,” the complaint states.

Spokespeople for Lilly and Sanofi provided written statements that were identical to those offered when The Daily Record reported on the January lawsuit by the Baltimore City Board of School Commissioners.

“These copycat lawsuits are baseless,” a Lilly spokesperson stated. “Lilly has been working for years to reduce insulin out-of-pocket costs for people with diabetes, against the headwinds of those — like parties filing these lawsuits — that benefit from rebates and choose higher list-price medicines over lower-priced options.”

A Sanofi spokesperson wrote, “While we will not comment on the specifics of the allegations, Sanofi’s pricing practices have always complied with the law and the company is committed to helping patients access the medicine they need at the lowest possible price.”

This story has been updated.