Three major drugmakers persuaded a federal judge to drop antitrust claims in a case accusing them of overcharging for insulin while paying insurers kickbacks, but organized crime allegations are moving forward in court, reported Bloomberg.
Claims under the federal racketeering law can proceed against Eli Lilly, Novo Nordisk, and Sanofi-Aventis because the plaintiffs plausibly alleged schemes of unlawful bribery and mail and wire fraud, which are predicate offenses covered under that law, Judge Brian R. Martinotti of the US District Court for the District of New Jersey wrote in an unpublished opinion.
Express Scripts, CVS Health, and UnitedHealth Group—pharmacy benefit managers which help decide how a drug will be covered by insurance—are also defendants in the case and failed to evade the racketeering claims as well, according to the July 9 opinion.
The decision came the same day President Joe Biden issued an executive order aimed at deterring anticompetitive conduct and driving down prescription drug prices. Democratic lawmakers have been pushing for legislation that would direct the government to negotiate the price of insulin and other pharmaceutical products.
Lilly, Novo Nordisk, and Sanofi are accused in the lawsuit of inflating the official list price of insulin while the actual prices negotiated by pharmacy benefit managers remained flat due to massive rebates from drug companies.
The lawsuit, brought by drug distributors including FWK Holdings, alleges that those companies use the widening spread between insulin’s list and market prices as cover for the rebates because insurers reimburse PBMs based on a drug’s list price.
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