Jefferson Health Alleges Insulin Rebate Scheme Between PBMs and Drugmakers

A major nonprofit health system has filed a federal lawsuit accusing leading insulin manufacturers and pharmacy benefit managers (PBMs) of conspiring to inflate insulin prices through rebate-driven pricing practices that allegedly harm hospitals, employers, and public health plans.

Jefferson Health, a Philadelphia-based nonprofit health system, filed the complaint on December 30, 2025 in New Jersey federal court, alleging that drugmakers and PBMs manipulated insulin pricing structures in a way that forced health systems and self-insured plans to absorb higher costs for patient care.

Defendants Named in the Lawsuit

The lawsuit names 3 of the nation’s largest PBMs—CVS Caremark, Express Scripts, and Optum Rx—along with insulin manufacturers Eli Lilly, Novo Nordisk, and Sanofi.

Jefferson Health operates across multiple states and employs approximately 58 000 individuals, many of whom receive health benefits through the system. The health system also includes 32 hospitals and more than 200 specialized care centers, serving a large share of patients enrolled in Philadelphia’s public health insurance plan.

The filing follows a similar lawsuit brought by the City of Philadelphia, which alleged that PBM and manufacturer pricing practices harmed the city’s publicly funded health plan.

Allegations Center on Insulin Rebates and Formularies

At the heart of Jefferson Health’s complaint is a rebate-based pricing system that the health system alleges distorts insulin costs and shifts financial burdens onto certain purchasers.

According to the lawsuit, insulin manufacturers offer rebates tied to high list prices, which PBMs use to secure favorable formulary placement. While some commercial plans and pharmacies benefit from these rebates, Jefferson Health alleges that self-insured employers and public plans effectively subsidize those discounts by paying higher net prices.

“The insulin pricing scheme thus creates a ‘best of both worlds’ scenario for defendants,” the complaint states, asserting that manufacturers benefit from increased sales volume while PBMs receive manufacturer payments tied to elevated list prices. As rebates increase, the lawsuit alleges, manufacturers continue to raise list prices accordingly.

Insulin Pricing History Cited as Evidence

Jefferson Health selected insulin as the focus of the lawsuit due to its long-term pricing trajectory. The complaint notes that since the 1990s, the price of a single vial of insulin has increased from approximately $20 to as much as $350.

The lawsuit alleges that insulin pricing is driven less by traditional market forces and more by rebate negotiations between manufacturers and PBMs, a system Jefferson Health claims artificially inflates costs across the health care system.

Related Litigation and Regulatory Scrutiny

The PBMs named in Jefferson Health’s lawsuit are also defendants in a separate antitrust action brought by the Federal Trade Commission. That case, which remains stalled, focuses on alleged collusion involving insulin pricing and includes vertically integrated group purchasing organizations affiliated with the PBMs.

In October 2024, Texas also filed suit against Express Scripts, CVS Caremark, and Optum Rx, naming the same 3 insulin manufacturers. That case has not yet reached resolution, and limited updates have emerged since its announcement.

PBMs Deny Allegations

In response to the growing wave of litigation, CVS Caremark, Express Scripts, and Optum Rx have each denied allegations that they control or manipulate drug prices, maintaining that manufacturers set list prices independently.

Jefferson Health’s lawsuit is newly filed and has not yet been heard by a judge. As of now, none of the defendants have formally responded to the complaint in court.

Implications for Pharmacy and Health Plan Stakeholders

The case adds to ongoing legal and regulatory scrutiny of PBM rebate structures, insulin pricing, and the financial impact on hospitals, employers, and public health programs. Pharmacy professionals, health system leaders, and compliance teams will likely be watching closely as the litigation progresses and similar cases continue to emerge nationwide.

Key Takeaways

• Jefferson Health has filed a federal lawsuit alleging that insulin manufacturers and PBMs conspired to artificially inflate insulin prices through rebate-driven pricing practices.
• The defendants include major PBMs—CVS Caremark, Express Scripts, and Optum Rx—and insulin manufacturers Eli Lilly, Novo Nordisk, and Sanofi.
• The lawsuit claims that rebate structures favor certain commercial plans while shifting higher costs to self-insured employers, public plans, and health systems.
• Insulin pricing is a central focus due to dramatic price increases over several decades, which Jefferson Health alleges are disconnected from market forces.
• The case aligns with broader legal and regulatory actions targeting PBM practices, including ongoing FTC litigation and a similar lawsuit filed by Texas.
• Pharmacy and health system stakeholders should monitor the case closely, as outcomes could impact formulary design, rebate transparency, and drug pricing oversight.

Reference

Jefferson Health Accuses Drug Firms, PBMs Of Manipulating Insulin Prices. KFF Health News. Published January 8, 2026. Accessed January 9, 2026. https://kffhealthnews.org/morning-breakout/jefferson-health-accuses-drug-firms-pbms-of-manipulating-insulin-prices/#:~:text=full%20issue-,Jefferson%20Health%20Accuses%20Drug%20Firms%2C%20PBMs%20Of%20Manipulating%20Insulin%20Prices,Alstin%2C%201/8)