The City of Philadelphia filed a lawsuit on Tuesday, December 23, 2025, against a coalition of drug manufacturers and pharmacy benefit managers, accusing them of inflating the cost of insulin.
The Legal Allegations
In the complaint, Philadelphia alleges that the defendants-pharmacy benefit managers CVS Caremark, Express Scripts, and OptumRx, along with drug makers Eli Lilly, Novo Nordisk, and Sanofi-engaged in a pricing scheme that drove up the price of diabetes medications. The city seeks restitution, compensatory and punitive damages, and a court order to stop what it calls unfair pricing practices.
The lawsuit also asks the court to find that the defendants violated the federal RICO statute and the Pennsylvania Deceptive and Unfair Trade Practices Act.
Why Insulin Matters to the City
Philadelphia officials say the city has been forced to overpay for insulin and other diabetes drugs while covering health benefits for more than 30,000 city employees and their dependents. The city notes that about 14 percent of Philadelphia adults live with diabetes, making affordable access to insulin a public health priority.
“No one should have to worry whether they will have to go without life-saving medication due to high costs,” said Philadelphia Mayor Cherelle Parker in a news release. “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 that are responsible for delivering health services to the highest standard.”
Department of Public Health Commissioner Palak Raval-Nelson added, “Philadelphia suffers from one of the highest rates of diabetes in the United States, especially in our Black and brown communities. Thanks to medications like insulin, Philadelphians suffering from diabetes can live a full, healthy life. Untreated, it can lead to disfigurement and death. When people cannot afford their insulin, they frequently go without or cut back, leading to disastrous consequences both for themselves and Philadelphia as a whole. Their lives are degraded, and we all pay the associated health costs.”
The Numbers Behind the Price Surge
According to city officials, insulin costs manufacturers as little as $2 to produce. In the 1990s, the average price of a vial was around $20. Today, the price ranges from $300 to over $700 per vial.
Company Responses
OptumRx
An Optum Rx spokesperson replied via email, stating:
“This baseless action demonstrates a profound misunderstanding of how drug pricing works. For many years, Optum Rx has aggressively and successfully negotiated with drug manufacturers and taken additional actions to lower prescription insulin costs for our health plan customers and their members, who now pay an average of less than $18 per month for insulin. PBMs, like Optum Rx, are the key counterweight to pharmaceutical companies’ otherwise unchecked monopoly power to set and raise drug prices.”
CVS Caremark
CVS Caremark issued a statement saying:
“Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture. Nothing in our agreements prevents drug manufacturers from lowering the prices of their insulin products and we would welcome such an action. Allegations that we play any role in determining the prices charged by manufacturers for their products are false, and we intend to vigorously defend against this baseless suit.”
Novo Nordisk
A Novo Nordisk spokesperson responded:
“Novo Nordisk believes that the allegations against it are meritless, and we intend to vigorously defend against these claims. While we will not comment further about pending litigation, we recognize that not all patient situations are the same and we have a number of different insulin affordability offerings available through NovoCare®. Importantly, we continually review and revise our offerings as well as work with diverse stakeholders to create solutions for differing patient needs.”
Key Takeaways
- Philadelphia alleges a coordinated pricing scheme by PBMs and drug makers has inflated insulin prices from $20 to $300-$700 per vial.
- The city seeks restitution, damages, and a court order to halt unfair practices, citing RICO and state trade-practice laws.
- Company statements reject the claims, asserting they do not set insulin prices and that they are working to lower costs for patients.
The lawsuit underscores a growing tension between municipal governments and the pharmaceutical industry over drug affordability, particularly for essential life-saving medications like insulin.
