Oregon AG Files $900M Lawsuit Alleging Insulin Price-Fixing Scheme Involving PBMs and Manufacturers

Oregon Attorney General Dan Rayfield has filed a sweeping lawsuit against 3 of the nation’s largest insulin manufacturers and 3 major pharmacy benefit managers (PBMs), alleging a coordinated scheme to artificially inflate insulin prices at the expense of patients. The complaint seeks more than $900 million in damages and accuses the defendants of violating Oregon’s Unlawful Trade Practices Act through deceptive and unconscionable conduct.

The lawsuit was filed in Multnomah County Circuit Court and names insulin manufacturers Novo Nordisk, Sanofi, and Eli Lilly, along with PBMs Express Scripts, CVS Caremark, and Optum—entities that collectively dominate the insulin and prescription drug markets.

Allegations of Coordinated Pricing and Rebate Manipulation

According to the complaint, the manufacturers and PBMs allegedly worked together to drive up insulin list prices in order to maximize rebate payments. The lawsuit claims manufacturers raised list prices not because of increased production costs or innovation, but to secure favorable placement on PBM formularies.

Under the alleged scheme, higher list prices resulted in larger rebates paid by manufacturers to PBMs. The complaint asserts that these rebates and fees increased profits for both manufacturers and PBMs, while patients—particularly those without insurance or with high-deductible plans—were left to bear the inflated costs at the pharmacy counter.

The lawsuit further alleges that PBMs intentionally excluded lower-cost insulin alternatives from formularies, limiting patient access to more affordable treatment options and effectively locking in elevated prices across the insulin market.

Impact on Patients and Public Health

The complaint details significant harm to Oregon patients, especially uninsured and low-income individuals who rely on insulin to manage diabetes. As insulin prices rose, patients were allegedly forced to ration doses, reuse needles, use expired insulin, or skip meals in an attempt to manage blood sugar levels.

Attorney General Rayfield emphasized that the alleged conduct extended beyond financial harm, contributing to stress, anxiety, and broader mental health challenges for families already struggling with rising health care costs.

“This is about more than insulin prices,” Rayfield said. “When companies jack up the price of life-saving drugs, they don’t just impact wallets—they exacerbate stress, anxiety, and mental health crises for people who have no choice but to pay.”

Legal Claims and Relief Sough

The lawsuit alleges violations of Oregon’s Unlawful Trade Practices Act, including misleading conduct and unconscionable practices that exploited a highly vulnerable population dependent on life-sustaining medication.

The Attorney General is seeking:

• A court order halting the alleged pricing and rebate scheme
• Restitution for affected consumers
• Disgorgement of profits allegedly obtained through unlawful conduct
• Monetary damages estimated to exceed $900 million

Broader Enforcement Efforts Targeting Drug Pricing

The filing represents the first major enforcement action announced in 2025 as part of a broader effort by the Oregon Department of Justice (ODOJ) to address prescription drug pricing practices. Attorney General Rayfield indicated that the state is actively examining the role of PBMs and other intermediaries in the prescription drug supply chain and continues to investigate additional companies and business practices that may contribute to inflated drug costs.

ODOJ also noted that it reached settlements related to inflated drug prices in the previous year, signaling continued regulatory and legal scrutiny of pharmaceutical pricing strategies.

“We are working to bring the cost of prescription drugs down for working families,” Rayfield said. “Oregonians can expect more action in the near future.”

Conclusion

For pharmacists, PBMs, manufacturers, and health care attorneys, the lawsuit underscores increasing state-level enforcement targeting rebate structures, formulary decision-making, and drug pricing transparency. The case may also have broader implications for how PBMs and manufacturers structure rebate agreements and justify formulary exclusions—particularly for essential medications such as insulin.

As litigation unfolds, pharmacy stakeholders nationwide will be closely watching whether Oregon’s claims prompt further enforcement actions or influence future regulatory reforms aimed at curbing prescription drug costs.

Key Takeaways

• State scrutiny of PBM rebate practices is intensifying. The Oregon lawsuit highlights growing enforcement efforts targeting how PBM formulary placement and manufacturer rebates may contribute to inflated drug prices—particularly for essential, life-sustaining medications like insulin.
• Formulary exclusion decisions may face increased legal risk. Allegations that lower-cost insulin options were intentionally excluded from formularies underscore potential exposure for PBMs and manufacturers when access restrictions disproportionately harm vulnerable patient populations.
• Insulin pricing litigation continues to expand beyond federal action. By invoking state consumer protection laws and seeking significant damages, Oregon’s case signals that attorneys general may increasingly pursue state-level remedies to address prescription drug pricing practices.

Reference

Attorney General Dan Rayfield files lawsuit seeking $900 million to hold drug companies and middlemen accountable for skyrocketing insulin prices. Oregon Department of Justice. Press release. Published January 7, 2026. Accessed January 14, 2026. https://www.doj.state.or.us/media-home/news-media-releases/ag-rayfield-files-lawsuit-seeking-900-million-over-skyrocketing-insulin-prices/