Cigna, CVS Health, and UnitedHealth Group face RICO allegations in a sweeping insulin pricing lawsuit filed by New Haven.
The City of New Haven, Connecticut, is taking on some of the biggest names in the insurance and pharmaceutical industries, accusing them of running a coordinated scheme to inflate the price of diabetes medications over the better part of a decade.
The case, docketed on January 8, 2026, as Case No. 2:26-cv-01542, pulls in three insulin manufacturers — Eli Lilly and Company, Novo Nordisk Inc., and Sanofi-Aventis U.S. LLC - alongside the pharmacy benefit management operations of Cigna Health and Life Insurance Company, Evernorth Health, Inc. (formerly Express Scripts Holding Company) and affiliates, CVS Health Corporation and its Caremark subsidiaries, and UnitedHealth Group, Inc. through Optum and OptumRx, among others. New Haven, which runs self-insured health plans for its employees and eligible retirees, says it has been paying artificially inflated prices for insulin and other diabetes drugs as a result.
At the center of the case is what the filing describes as the "Insulin Pricing Scheme" - an arrangement allegedly spanning from at least 2010 to 2019, in which manufacturers set bloated list prices and funneled secret rebates, administrative fees, and other undisclosed payments to PBMs. In return, the PBMs allegedly gave those higher-priced drugs preferred spots on their formularies.
The filing paints a picture of a system designed to keep payors in the dark. PBM contracts with clients allegedly defined "rebates" narrowly - tying them only to patient drug utilization - while payments for formulary placement were labeled "administrative fees," putting them beyond payors' contractual audit rights. PBMs also allegedly pocketed the spread between what they charged payors and what they actually paid pharmacies.
The pricing behavior described in the filing is striking. Between 2009 and 2015, Sanofi and Novo Nordisk allegedly raised insulin list prices in tandem thirteen times, matching each other down to the decimal point within days and sometimes hours. Internal Eli Lilly communications referenced in the filing show executives tracking competitors' moves and matching 9.9% price hikes. A Pew Charitable Trust study cited in the filing estimated that administrative and other fees flowing from manufacturers to PBMs tripled between 2012 and 2016, topping $16 billion. Sanofi's rebates to CVS Caremark for preferred placement allegedly ballooned from between 2% and 4% in 2013 to as high as 56% by 2018.
New Haven is pressing claims under the Racketeer Influenced and Corrupt Organizations Act, the Sherman Antitrust Act, the Connecticut Antitrust Act, and the Connecticut Unfair Trade Practices Act, and is seeking treble damages, disgorgement, punitive damages, and injunctive relief. No determination on the merits has been made.
The case is City of New Haven, Connecticut v. Eli Lilly and Company, et al.
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