Court Dismisses RICO Claims Against Insulin Makers

A federal judge in New Jersey ruled that a class of diabetes patients cannot sue insulin manufacturers under the Racketeer Influenced and Corrupt Organizations (RICO) Act because they did not buy the drugs directly from the manufacturers.

The February 2017 lawsuit, filed by 67 patients in the U.S. District Court for the District of New Jersey, accused Eli Lilly, Novo Nordisk and Sanofi’s U.S. unit of RICO violations and consumer-fraud in connection with spiraling prices. In a Feb. 15 ruling, District Judge Brian Martinotti allowed the consumer-fraud allegations to proceed but tossed the RICO claims.

In their complaint, the plaintiffs claimed the insulin manufacturers illegally raised the prices of their products to provide rebates for pharmacy benefit managers. Although they “adequately pled the various elements of a RICO claim,” they failed to directly purchase the analog insulin from the defendants, so the claims are barred by the indirect purchaser rule, Martinotti said.