Cleveland is the first city in the country seeking damages to recover millions in benefit payouts
Monday, July 24, 2023 — Cleveland — Today, the City of Cleveland filed a lawsuit against drug manufacturers and pharmacy benefit managers (PBMs) who orchestrated a pricing scheme that resulted in skyrocketing insulin prices and cost the city millions of dollars in prescription benefit payouts. The city is represented by the Law Department, the Cleveland firm of Kelley Ferraro, LLC, and others.
Cleveland is the first city in the country to file a lawsuit of this nature against the defendants.
Cleveland’s Chief Trial Counsel Elena Boop and Chief Assistant Law Director Amy Hough, who represent the city in the case, are honored to work with a team of talented lawyers to hold defendants accountable for skyrocketing insulin prices. This case is also deeply personal to them.
Amy Hough was diagnosed with Type 1 diabetes in December 1979. From age seven, she was warned about the dangers of not controlling her diabetes – blindness, heart disease, loss of limbs, dangerous pregnancy and a shorter life. She needs access to a steady supply of insulin so she can take the right dosage at the right time to keep diabetes in check. Insulin is not something she, or any other diabetic, can save up for to buy in the future. If she puts off the purchase, she risks her life. Prior to working for the city, Amy had resorted to using high-interest credit cards to buy this life-sustaining medication.
When Elena Boop’s 15-year-old daughter was diagnosed with Type 1 diabetes, it became clear that her small legal practice was no longer sustainable, due to the out-of-pocket cost of insulin medications. Insulin prices effectively destroyed Elena’s small business. The last seven years have been shaped by constant worrying of how her daughter would be able to afford insulin once she turns 26 and is no longer on the city’s health plan. Her daughter’s career choices and future, including where she lives, have been shaped by insulin costs rather than her dreams and inspirations.
Diabetics need insulin to stay alive. The defendants exploit this reality to guarantee their price-fixing scheme, making insulin unaffordable to individuals and resulting in exorbitant costs for prescription benefit sponsors like the City of Cleveland.
Diabetic medications are among the highest costs under the City’s prescription benefit plan provided to its employees. The lawsuit seeks to recover those costs. It alleges violations of federal Racketeer Influenced and Corrupt Organizations Act (RICO), Civil Conspiracy and Unjust Enrichment and seeks to recover compensatory and treble damages, punitive damages, attorneys’ fees, costs and interest.
