The complaint also reflects a broader trend of state attorneys general bringing antitrust cases independently rather than following federal enforcers.
On October 9, 2026, the Pennsylvania Attorney General’s Office sued the country’s three largest pharmacy benefit managers (PBMs) (Express Scripts, CVS Caremark and OptumRx) and three largest insulin manufacturers (Eli Lilly, Novo Nordisk and Sanofi-Aventis US), alleging that they participated in an alleged insulin-pricing scheme. According to the complaint, the manufacturers raised list prices for their diabetes drugs and secretly paid rebates and fees to the PBMs in exchange for preferred formulary placement of those drugs, while the PBMs excluded lower-priced alternatives and profited from the inflated prices. As a result, the complaint alleges, diabetes medications that cost less than $2 to produce rose from about $20 to between $300 and $700. The complaint further alleges that the PBMs falsely told Pennsylvania patients and payors that they use their market power to lower prices.
The alleged scheme arises from the PBMs’ role as middlemen among drug manufacturers, health insurers and pharmacies. Health insurers and other payors contract with PBMs to manage the prescription drug portion of their coverage. In that role, PBMs negotiate with manufacturers, decide which drugs a health plan will cover (a list called a formulary) and set the price that pharmacies are paid for filling prescriptions. Because formulary placement largely determines whether patients can access a drug, manufacturers pay PBMs rebates and fees to secure favorable coverage for their drugs. The complaint alleges that these payments are calculated as a percentage of a drug’s list price, so the higher the list price, the larger the payment to the PBM. This arrangement allegedly gives both sides a reason to favor higher list prices: manufacturers offer larger payments to secure formulary coverage, and PBMs keep a larger share of those growing payments. Meanwhile, patients without insurance, or with deductibles or coinsurance, often pay based on the list price, so they bear the inflated prices at the pharmacy counter.
PBMs Remain Under State and Federal Pressure
The Pennsylvania attorney general’s lawsuit follows the Federal Trade Commission’s (FTC) 6(b) study of the PBM industry and its September 20, 2024, action against the same three PBMs and their affiliated rebate aggregators (Ascent, Emisar and Zinc) over the same insulin rebating practices. Express Scripts settled with the FTC in February 2026, and OptumRx reached a proposed settlement in June 2026 that the agency is still reviewing. CVS Caremark settled in July 2026, agreeing to changes such as delinking its compensation from list prices so that its fees no longer rise with a drug’s list price.
Pennsylvania’s lawsuit is just the latest sign that, even as they resolve the FTC’s claims, the three largest PBMs are continually exposed to actions by state enforcers seeking monetary and injunctive relief for the same and similar conduct.
State Attorneys General Are Acting on Their Own
The complaint also reflects a broader trend of state attorneys general bringing antitrust cases independently rather than following federal enforcers. Speakers at the American Bar Association Antitrust Section’s March 2026 spring meeting identified independent state enforcement as a leading antitrust trend, particularly where federal enforcers decline to act or choose to settle. The challenge to the proposed Kroger/Albertsons merger illustrates states’ willingness to proceed on their own. The Washington attorney general sued in state court under the state’s Consumer Protection Act in January 2024, before the FTC filed its own challenge, and in December 2024 won a permanent injunction blocking the deal. See State of Washington v. Kroger Co., No. 24-2-00977-9 SEA (Wash. Super. Ct. King Cnty. Dec. 10, 2024). The same day, in a parallel action brought by the FTC together with eight states and the District of Columbia, the U.S. District Court for the District of Oregon preliminarily enjoined the merger pending the FTC’s administrative proceeding, and the parties abandoned the deal the next day. See FTC v. Kroger Co., No. 3:24-cv-00347-AN (D. Or. Dec. 10, 2024).
The Live Nation/Ticketmaster litigation is another prominent example. In May 2024, the U.S. Department of Justice (DOJ) Antitrust Division and a coalition of state attorneys general jointly sued Live Nation Entertainment and its subsidiary Ticketmaster in the Southern District of New York, alleging that the companies unlawfully monopolized markets for live event promotion and primary ticketing in violation of Section 2 of the Sherman Act. See United States v. Live Nation Entertainment, Inc., No. 1:24-cv-03973 (S.D.N.Y.). After the DOJ and several of the states settled their claims mid-trial in March 2026, 33 states and the District of Columbia rejected the settlement, continued to litigate on their own and, in April 2026, obtained a jury verdict in their favor. The result shows that states are willing and able to carry major antitrust cases through trial without federal partners and that a federal settlement no longer necessarily ends a defendant’s exposure for the same conduct.
An Antitrust Case Without an Antitrust Statute
The Pennsylvania attorney general’s lawsuit is also significant because Pennsylvania—unlike all other states—has no general antitrust statute. The complaint alleges that the defendants’ conduct violates Pennsylvania’s consumer protection statute, the Unfair Trade Practices and Consumer Protection Law (UTPCPL), 73 P.S. § 201-1 et seq., even though the UTPCPL does not expressly address price-fixing, market allocation or other anticompetitive agreements such as the one alleged in the complaint.
This is not the first time that the Pennsylvania Attorney General’s Office has attempted to use the UTPCPL to pursue antitrust claims. In Anadarko Petroleum Corp., the office sued a natural gas producer for alleged anticompetitive conduct in natural gas leases it entered with landowners in Pennsylvania’s Marcellus Shale region. Pennsylvania’s Commonwealth Court held that the state’s antitrust claim—an alleged market-allocation agreement between Anadarko and another natural gas producer—was not legally viable because conduct generally impairing competition did not fit within any of the UTPCPL’s enumerated categories of unfair conduct. The court, however, allowed to proceed claims that Anadarko misled landowners under the UTPCPL’s catch-all provision for “fraudulent or deceptive conduct.” Anadarko Petroleum Corp. v. Commonwealth, 206 A.3d 51, 60 (Pa. Commw. Ct. 2019) (en banc), aff’d in part, rev’d in part, 247 A.3d 934 (Pa. 2021).
The Pennsylvania Supreme Court later threw out those deception claims as well, holding that the UTPCPL did not reach the producers’ conduct as purchasers of mineral estates, but it did not address the antitrust question. Commonwealth v. Chesapeake Energy Corp., 247 A.3d 934 (Pa. 2021). The Commonwealth Court’s antitrust analysis therefore remains the most relevant appellate guidance on the reach of Pennsylvania’s law.
The Pennsylvania attorney general’s insulin complaint appears drafted with that framework in mind. It pairs its competition theory with deception allegations under the UTPCPL’s catch-all provision, alleging that the manufacturers published list prices “untethered” from net prices and that the PBMs misrepresented their “savings” and the purposes of their formularies. Because it was filed in the Commonwealth Court, the case may become a new test of this question of Pennsylvania law.
What This Means for Businesses in Pennsylvania and Across the Country
The strategy of the Pennsylvania Attorney General’s Office reaches well beyond the pharmaceutical supply chain. Any company selling goods or services in Pennsylvania should expect that conduct a federal enforcer might challenge under the Sherman Act or FTC Act could be recast by that office as a UTPCPL claim, particularly where pricing or competitive practices are paired with public statements about price, value or savings.
Businesses in Pennsylvania should review their antitrust and consumer protection compliance programs together, focusing on how pricing, rebates and competitive positioning are described to customers and the public, and should consult experienced counsel if they receive a civil investigative demand or other inquiry from the Attorney General’s Office.
Businesses nationwide should be aware that state regulators are increasingly going their own way in antitrust enforcement and should plan their antitrust and pricing compliance strategies to comply with both federal and state antitrust laws.
For More Information
If you have any questions about this Alert, please contact Jonathan L. Swichar, Bradley A. Wasser, any of the attorneys of our Pharmacy Litigation Group, Sean P. McConnell, any of the attorneys in our Antitrust and Competition Group, Christopher H. Casey, Patrick Gavin, any of the attorneys in our State Attorneys General Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.