West Virginia Files Lawsuit Alleging Optum’s PBM Practices Contributed to Opioid Crisis

West Virginia has filed a federal lawsuit alleging that Optum and several UnitedHealth Group subsidiaries played a central role in worsening the state’s opioid epidemic through formulary decisions, data-sharing relationships with opioid manufacturers, and inadequate pharmacy safeguards. The 134-page complaint asserts that Optum’s work as a PBM, data analytics provider, mail-order pharmacy, and discount card operator collectively expanded access to opioids while limiting oversight intended to prevent misuse and diversion.

Rebate-Driven Formulary Placement at the Center of Allegations

The State alleges that Optum negotiated rebates with opioid manufacturers that were contingent on favorable formulary treatment. These contracts often included “no disadvantage” or “parity” provisions that prevented Optum from applying utilization management tools—such as prior authorization, step therapy, or dose limits—unless they were applied uniformly across all opioid competitors.

According to the complaint, these arrangements enabled high-dose opioid products to remain widely accessible, even as internal Optum teams expressed concerns about overprescribing and patient safety. Internal emails cited by the State show staff warning that opioid restrictions could jeopardize “significant rebates.”

OptumInsight’s Data and Marketing Collaborations

OptumInsight, the company’s analytics and consulting arm, is alleged to have collaborated with manufacturers such as Purdue, Janssen (JnJ), Endo, and Teva on research, payer presentations, and clinical education materials that supported expanded opioid use for chronic pain.

The complaint states that OptumInsight also supplied manufacturers with prescriber-level and pharmacy-level claims data, enabling them to identify high-value targets for sales outreach and adjust marketing strategies accordingly.

Mail-Order Pharmacy Oversight Concerns

The complaint highlights internal communications indicating Optum’s mail-order pharmacy dispensed large quantities of controlled substances while pharmacists faced performance quotas that limited the time available for red-flag investigations. Examples cited include prescriptions with potentially dangerous drug combinations, unusually high morphine milligram equivalents (MMEs), or signs of doctor-shopping.

West Virginia argues these dispensing practices violated requirements under the federal Controlled Substances Act and state regulations governing Schedule II–IV medications.

Discount Card Programs Described as a “Back Door”

Optum Perks and Optum Discount Card Services—the company’s consumer cash-pay programs—are described in the complaint as bypass mechanisms that allowed patients to obtain opioids outside the reach of insurer safety protocols. Because cash transactions are not subject to formulary rules or UM reviews, the State alleges these programs expanded access for individuals who otherwise would have hit quantity or authorization limits.

The complaint quotes internal documents showing Optum declined to block opioids on these platforms due to projected revenue losses.

Legal Claims and Requested Relief

West Virginia asserts causes of action including negligence, civil conspiracy, public nuisance, civil RICO, and violations of the West Virginia Consumer Credit and Protection Act. The State alleges Optum formed an “association-in-fact enterprise” with opioid manufacturers, using formulary placement, data sharing, and mail-order dispensing to drive opioid sales.

The lawsuit seeks damages, disgorgement of profits, injunctive relief affecting Optum’s formulary and dispensing practices, and long-term abatement funding for opioid-related health and social services. Optum and UnitedHealth Group have not yet responded to the allegations.

Key Takeaways

• Rebate-driven formulary decisions allegedly incentivized broad opioid access.
• “Parity” clauses in manufacturer contracts reportedly limited
• Optum’s ability to implement prior authorization or quantity limits.
• OptumInsight’s data and consulting services were allegedly used by manufacturers to target prescribers and expand opioid utilization.
• Mail-order dispensing practices reportedly lacked adequate red-flag review despite high prescription volumes.
• Discount card programs allegedly enabled patients to bypass insurer-controlled opioid safety measures.
• West Virginia seeks civil RICO damages, injunctive relief, and abatement funding.

Reference

State of West Virginia ex rel., John B. McCuskey, Attorney General v UnitedHealth Group Inc, Optum Inc, OptumInsight, Inc, et al. US District Court Northern District of WV. 5:25-cv-267. 2025.