Arlington County Employs Mob-Busting RICO Law Against Pharmaceutical Companies Over Insulin Pricing
Written by: Sam Orlando
ARLINGTON COUNTY, VIRGINIA - In a bold legal move, the County Board of Arlington County, Virginia has filed a lawsuit against three major pharmaceutical companies — Eli Lilly, Sanofi, and Novo Nordisk — and pharmacy benefit managers (PBMs) CVS Caremark, Express Scripts, and OptumRx. The lawsuit, filed in the United States District Court for the Eastern District of Virginia, alleges a deceptive and unlawful pricing scheme for insulin medications, resulting in significant financial harm to the county and its residents.
The complaint outlines a disturbing picture of skyrocketing costs for diabetes medications over the past two decades, highlighting that while the average cost of consumer goods has risen modestly, the cost of some diabetes medications has increased more than tenfold. This drastic price hike, according to the lawsuit, is not due to increased production costs or market forces but rather a result of a calculated effort by the defendants to boost their profits.
Arlington County, which provides health benefits to its employees, retirees, and dependents, alleges that the steep prices have directly impacted its budget, hindering its ability to provide essential services to the community. According to the lawsuit, diabetes is a significant health concern in Virginia, with over 701,000 residents — about 10.4% of the adult population — living with the condition. The County asserts that the cost of diabetes in Virginia amounts to approximately $6.1 billion per year in direct medical expenses.
The lawsuit accuses the pharmaceutical companies and PBMs of engaging in a “best of both worlds” scenario, where the manufacturers allegedly inflate their list prices for insulin medications and then pay a portion of that inflated price back to the PBMs. This arrangement is claimed to be a quid pro quo for favorable placement on the PBMs’ national formularies, which dictate the availability and price of drugs for most of the U.S. market.
The County Board is seeking injunctive relief, restitution, disgorgement, and damages for the alleged harm caused by this pricing scheme. They argue that the scheme is a violation of the Racketeer Influenced and Corrupt Organizations Act and Virginia law.
This lawsuit represents a significant challenge to the pricing practices of major pharmaceutical companies and PBMs in the insulin market, shining a spotlight on the broader issue of drug pricing in the United States.