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PBMs, Drug Companies File Briefs to Support Dismissal of Insulin Price-Fixing Scheme Allegations

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The defendants in litigation targeting pharmaceutical companies and pharmacy benefit managers (PBMs) over an alleged racketeering, kickback, and insulin price-fixing scheme are fighting back against the plaintiffs in an effort to support the defendants’ case for dismissal, per a pair of Monday reply briefs.

Plaintiffs FWK Holdings LLC and Professional Drug Company Inc. are the lead plaintiffs in the Nov. 6, 2020, first amended complaint (FAC) in a suit claiming that one group of defendants, the PBMs — which include CVS Health Corporation, UnitedHealth Group Inc., and Optum Inc., among others — solicited kickbacks from the manufacturer defendants, Eli Lilly and Company, Sanofi-Aventis U.S. LLC, and Novo Nordisk Inc. The manufacturers, in turn, allegedly paid the PBMs to include insulin drugs Levemir, NovoLog, Lantus, and Humalog on health plan providers’ “formularies.” The formularies “determine whether and to what extent the nation’s health benefit providers pay for their insureds to receive life sustaining insulins,” according to the FAC. As a result, the defendants worked in concert to fix the insulin drugs’ prices at “supra-competitive levels,” all in violation of the Sherman Act, Robinson-Patman Act, and Racketeer Influenced and Corrupt Organization (RICO) Act, the FAC alleged.

Both groups of defendants moved to dismiss the case Jan. 14, arguing that the plaintiffs did not sufficiently allege their claims and failed to show causation between the allegations and the purported injury. The plaintiffs fired back with an opposition to the motions to dismiss, which prompted the operative reply briefs from the PBM defendants and manufacturer defendants

The briefs, which essentially were reiterative of their initial motions to dismiss, emphasized the defendants’ belief that the plaintiffs did not state plausible facts to support their claims that the PBMs and drug manufacturers worked in concert to raise insulin prices.

The PBMs in particular argued that the plaintiffs did not sufficiently plead their allegations that the PBMs “did anything other than pursue their independent business interests” while the manufacturer defendants contended that a precedential Third Circuit case, which rejected an “indistinguishable” Sherman Act claim, means the claims against them necessarily should fail. Both defendant groups also claimed that the plaintiffs’ RICO and Robinson-Patman claims are facially invalid, with the manufacturer defendants arguing that they are protected by a safe harbor.

Cohn Lifland Pearlman Herrmann & Knopf LLP, Roberts Law Firm PA, Barrett Law Group PA, NastLaw LLC, Kohn, Swift & Graf PC, the Law Offices of Michael Fishbein, and Neal & Harwell PLC are representing the plaintiffs. The PBM defendants are represented by O’Toole Scrivo LLC, Alston & Bird LLP, Marino, Tortorella & Boyle PC, and Williams & Connolly LLP, and the manufacturer defendants are represented by Reed Smith LLP, Covington & Burling LLP, Walsh Pizzi O’Reilly Falanga LLP, Jones Day, Gibbons PC, and Davis Polk & Wardwell LLP.

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