School District, Burdened by Health Costs, Sues Companies Over Price of Insulin

The Oceanside Unified School District is suing a group of pharmaceutical companies and pharmacy benefit managers in federal court for allegedly inflating the price of insulin.

Officials argue in the 200-page lawsuit that the allegedly high costs have forced the district to overpay for its employees’ health benefits.

The suit, filed in U.S. District Court in New Jersey, is one of several in recent years that allege pharmaceutical giants Eli Lilly, Novo Nordisk and Sanofi conspired with the country’s largest pharmacy benefit managers – Express Scripts, CVS Caremark and Optum RX – to artificially drive up insulin costs.

There are scores of other such suits, including those brought by cities and states, that say ballooning insulin prices have caused them to overpay for benefits by hundreds of millions of dollars. California filed its case in January 2023.

Frantz Law Group in San Diego, which represents Oceanside Unified, alleges in its complaint that drug manufacturers and pharmacy benefit managers (PBMs) have routinely engaged in a scheme to inflate costs to the detriment of consumers.

The alleged scheme involves PBMs placing certain drugs on its list of covered medications, known as a formulary. In exchange, drug manufacturers allegedly provide PBMs with massive rebates and inflate drug prices in order to pay them.

Frantz Law Group CEO James Frantz said an examination of school district financial records was underway to determine what losses the district incurred through the alleged overpricing. He also said his firm is speaking with several other school districts in San Diego County to see if they might join the litigation.

“Many people within the Oceanside Unified School District and across America rely on affordable insulin for their survival, and it’s unacceptable for pharmaceutical companies and pharmacy benefit managers to manipulate insulin prices for the sake of excessive corporate profits,” Frantz said in a statement.