Imagine a life-saving drug that costs less than $2 to produce but sells for hundreds of dollars at the pharmacy counter. For insulin—a medication millions of Americans with diabetes depend on daily—that’s the grim reality. Over the past two decades, insulin prices have surged over 1,000%, leaving patients rationing doses, families scrambling to afford treatment, and a nation furious at a system that seems stacked against them.

The human toll is staggering: one in four insulin users has resorted to skipping or stretching doses, risking their health—or their lives—because of cost. This isn’t just a market glitch—it’s a scandal.

At the heart of the insulin price-fixing crisis are pharmaceutical giants and pharmacy benefit managers (PBMs) accused of colluding to inflate costs for profit while patients and taxpayers foot the bill. Across the country, the backlash is growing, and states like West Virginia are stepping up to fight back against these powerful players.

The National Insulin Price-Fixing Crisis

The skyrocketing cost of insulin didn’t happen overnight—it’s a decades-long escalation that’s turned a once-affordable drug into a financial nightmare for millions. Take Humalog, a widely used insulin brand from Eli Lilly: in 1997, a 10 mL vial cost $21.23. By 2017, that price had ballooned to $275—a jaw-dropping 1,527% increase.

Compare that to consumer goods like food and fuel, which rose 25% over the same period, and it’s clear this isn’t normal inflation. This is a scandal that has left patients and policymakers looking for answers—and pointing fingers at a handful of powerful players.

Key Players

Three manufacturers and three PBMs dominate the insulin market, wielding outsized influence over prices and access. They are:

• Manufacturers – Eli Lilly, Novo Nordisk, and Sanofi: Known as the “Big Three,” these companies produce nearly all the insulin sold in the U.S. Their tight grip on supply limits competition, giving them leverage to set prices that critics say defy any semblance of reason or fairness.
• PBMs – CVS Caremark, Express Scripts, and OptumRx: These pharmacy benefit managers (PBMs) control about 80% of the prescription drug market, acting as middlemen between manufacturers and insurers. They dictate which drugs make it onto insurance formularies, and their decisions ripple through the entire healthcare system.

The Scheme

So how did prices spiral so high? It is largely due to a rebate-driven cycle that appears to be rigged in favor of the big players in the industry at the expense of consumers. PBMs demand hefty rebates from manufacturers to secure prime spots on insurance formularies—lists of covered drugs. To cover those payments and still profit, manufacturers jack up list prices, a practice dubbed “shadow pricing” for its murky transparency.

The Federal Trade Commission has labeled this a “chase-the-rebate” strategy. PBMs favor high-priced drugs with big rebates over cheaper alternatives, locking in a system where higher costs mean higher profits for them. Patients and payers—like government health programs—end up stuck with the tab, paying inflated prices that bear little relation to the drug’s $2 production cost.

The Impact

The fallout is devastating. About 14% of insulin users ration their doses, skipping shots or stretching supplies to make ends meet. This is a choice that can lead to hospitalizations, complications, or worse.

Public health budgets buckle under the strain, with states and federal programs shelling out billions to cover these costs. The outrage is palpable. Patients, advocates, and lawmakers alike are fed up with a system where lifesaving medicine feels more like a luxury good than a necessity.

Nationwide Legal Pushback

The insulin price crisis hasn’t gone unanswered. Across the U.S., legal and legislative efforts are mounting to hold manufacturers and PBMs accountable. From federal lawsuits to state-led challenges, the pushback is gaining steam, signaling a reckoning for the players accused of driving up costs. Here’s how the fight is unfolding on multiple fronts.

Federal Actions

The federal government is taking aim at the heart of the problem. In September 2024, the Federal Trade Commission (FTC) filed a major lawsuit against the “Big Three” PBMs—CVS Caremark, Express Scripts, and OptumRx—charging them with anticompetitive practices that artificially inflate insulin prices.

The FTC alleges these giants systematically favored high-priced drugs with juicy rebates over cheaper options, locking patients into a cycle of escalating costs. Meanwhile, multidistrict litigation (MDL) in New Jersey (Case No. 2:23-md-3080) is consolidating dozens of lawsuits—from states, private payers, and class actions—into a single arena. A May 2024 order even opened the door for new plaintiffs to join, amplifying the pressure on PBMs and manufacturers alike.

State Efforts

States aren’t waiting for Washington to act—they’re leading their own charges. Minnesota has scored settlements with manufacturers like Novo Nordisk, forcing price concessions and rebates to ease the burden on residents. Texas, meanwhile, launched a 2024 lawsuit targeting both PBMs and insulin makers, alleging a conspiracy to gouge its healthcare system.

These cases reflect a growing trend: state officials, fed up with the impact on their budgets and citizens, are wielding their legal authority to demand accountability. From coast to coast, this patchwork of state-led actions is building momentum, challenging the status quo one courtroom at a time.

Legislative Moves

On Capitol Hill, lawmakers are eyeing structural fixes. The Pharmacy Benefit Manager Transparency Act, championed by Senator Maria Cantwell (D-WA), aims to peel back the curtain on PBM practices—banning deceptive tactics like spread pricing and forcing more accountability in rebate dealings. While progress has been slow, this bill and others signal a bipartisan appetite to rein in the middlemen blamed for insulin’s runaway costs.

West Virginia in the Thick of the Fight

While the insulin price crisis rages nationwide, West Virginia has emerged as a frontline player in the battle against Big Pharma’s middlemen. The WV state auditor is zeroing in on pharmacy benefit managers (PBMs), accusing them of inflating insulin costs that slam state health plans—like those covering public employees—and hit residents where it hurts most. With diabetes rates among the highest in the nation, West Virginia isn’t just fighting for dollars; it’s fighting for the lives of its citizens.

Case Background

The West Virginia state auditor’s lawsuit against two major PBMs began in state court as a bid to hold these middlemen accountable for soaring insulin prices. The auditor alleges the PBMs colluded with manufacturers to artificially inflate list prices, pocketing rebates while excluding cheaper alternatives from formularies, costing the state and its residents untold damages.

The Lawsuit

Powell & Majestro is representing the West Virginia State Auditor in this lawsuit. The case, now on appeal in the Fourth Circuit (Case No. 24-1924), has a hearing set for early May 2025 to settle jurisdictional questions—whether this case belongs in state or federal court.

Local Stakes

West Virginia’s lawsuit builds on a legacy of tackling healthcare costs head-on. The state’s Requiring Accountable Pharmaceutical Transparency, Oversight, and Reporting Act (SB 689) forces drug makers to disclose pricing data, arming officials with the tools to expose and challenge inflated costs.

This lawsuit amplifies that mission, targeting PBMs whose rebate schemes have strained budgets and priced patients out of care. For a state that’s been at the forefront of battling the opioid crises and healthcare disparities, taking on insulin price fixing is a natural extension of this fight that reaffirms its commitment to putting the best interests of its citizens first.

National Crisis with Local Resolve: The Road Ahead

The insulin price crisis is a national scandal that is decades in the making. Soaring costs, fueled by a handful of manufacturers and PBMs, have turned a $2 drug into a financial burden for millions. Yet, throughout the country, the pushback is growing.

Local battles, like West Virginia’s stand against price-fixing PBMs, are lighting the way, challenging a system that’s left patients rationing doses and taxpayers footing the bill. The legal outcomes ahead—whether in state courts or federal arenas—could reshape accountability in drug pricing, forcing transparency and fairness into an industry long overdue for change.

At Powell & Majestro, we are proud to represent the West Virginia state auditor in the state’s fight for fair insulin prices. Contact us at (800) 650-2889 or message us online to learn more about our work protecting communities from corporate overreach. And stay tuned as this case unfolds in 2025 and beyond.