O'Reilly lawsuit claims insulin costs inflated by managers and makers

Who is O'Reilly Automotive Inc.?

O'Reilly Automotive Inc., one of Springfield's largest companies, has filed a lawsuit against major pharmacy benefit managers (PBMs) and insulin manufacturers, alleging that they have colluded to artificially inflate the prices of insulin. The company provides health benefits to approximately 45,000 members, according to court records, and claims that the actions of these entities have significantly impacted its ability to offer affordable healthcare.

The lawsuit was filed on July 30 in the District of New Jersey and names three PBMs—CVS Caremark, Express Scripts, and Optum Rx—as well as three leading insulin manufacturers: Eli Lilly, Novo Nordisk, and Sanofi. These companies are among the top players in the global insulin market, and their alleged actions have drawn attention from both the public and regulatory bodies.

What Does the Lawsuit Allege?

O'Reilly’s lawsuit accuses the defendants of violating the Racketeer Influenced and Corrupt Organizations Act (RICO). According to the complaint, the PBMs and insulin manufacturers have engaged in coordinated efforts to dictate the availability and pricing of insulin across most of the U.S. market. The lawsuit states that the manufacturers have increased insulin prices by up to 1,000% in a synchronized manner, often mirroring each other’s price changes within days or even hours.

This alleged collusion has led to significant financial burdens for patients and organizations like O'Reilly, which now seeks treble damages, restitution, and other legal remedies. The company also requests punitive damages and reimbursement for the costs of the lawsuit.

Understanding the RICO Act

The RICO Act, established in 1970, was originally designed to combat organized crime groups such as the mafia. It allows for the prosecution of individuals involved in a pattern of racketeering activity, which includes repeated illegal acts like money laundering, drug trafficking, and bribery. To be convicted under RICO, at least two separate racketeering activities must occur within a 10-year period.

In this case, O'Reilly argues that the actions of the PBMs and manufacturers meet the criteria for racketeering, as they have allegedly engaged in a coordinated effort to manipulate insulin prices for profit.

Other Legal Actions Against PBMs and Manufacturers

O'Reilly is not the only entity taking legal action against the PBMs and insulin manufacturers. In September 2024, the Federal Trade Commission (FTC) filed a lawsuit against the same three PBMs, accusing them of creating a "perverse drug rebate system" that leads to inflated insulin prices. This case highlights growing concerns about how the pharmaceutical industry operates and the impact it has on patients.

Other lawsuits have also been filed by state attorneys general and various organizations. For example:

• Oklahoma Attorney General Gentner Drummond filed a lawsuit in May 2024.
• Texas Attorney General Ken Paxton took legal action in October 2024.
• Massachusetts Attorney General Andrea Joy Campbell filed a suit in January 2025.
• Baltimore City Public Schools also joined the legal battle in January 2025.

According to recent reports, the number of insulin pricing litigation cases has surged from 85 to over 400 since early December 2024, indicating a broader trend of dissatisfaction with current pricing practices.

The Impact of Rising Insulin Prices

The rising cost of insulin has created dangerous situations for many patients. A 2018 Yale study found that one in four diabetes patients had to cut back on insulin due to cost, and some have even died as a result. This issue has sparked widespread concern, particularly as insulin remains a life-saving medication for millions of Americans.

Responses from the Defendants

While O'Reilly’s lawsuit continues, several of the defendants have issued statements refuting the allegations. CVS Caremark emphasized that it has worked to increase competition and lower insulin costs for patients, including offering a $25 insulin program through its ReducedRx initiative.

Express Scripts did not provide a statement at the time of publication. Optum Rx called the lawsuit baseless, claiming that it has actively negotiated lower insulin prices for its customers.

Eli Lilly stated that previous cases involving similar allegations have either been dismissed or settled without monetary compensation. The company also highlighted its efforts to cap out-of-pocket costs for insulin at $35 per month.

Novo Nordisk and Sanofi also denied the allegations, stating that their pricing practices comply with the law and that they have implemented various programs to help patients afford their medications.

Despite these responses, the ongoing legal battles reflect a deepening crisis in the insulin market, with calls for greater transparency and accountability from all parties involved.