Lawyers are predicting a spike in litigation after a new report from a federal agency.

The Federal Trade Commission published a second interim staff report on the prescription drug middleman industry, which focuses on pharmacy benefit managers’ influence over specialty generic drugs, including significant price markups by PBMs for cancer, HIV, and a variety of other critical drugs.

In the report, the FTC said pharmacy benefit managers (PBMs), charge significant markups for cancer, HIV, and other critical specialty generic drugs, marking up the prices of drugs by hundreds and thousands of percent, bringing in an additional $7.3 billion in revenue.

"In recent months, the national insulin price-fixing lawsuit has seen an incredible surge in case filings and we expect to see a continued uptick in filings across the country," attorney Benjamin J. Widlanski said Thursday. "There are already hundreds of filed cases covering millions of covered lives. Given the fact that there are states, counties, cities, school districts, pension funds, and other plaintiffs from all over the country, it would be difficult to find an active MDL with as large a scope as this case."

Widlanski is a partner at Kozyak Tropin & Throckmorton, who focuses his practice on complex commercial litigation and class actions and is one of four Co-Lead counsels New Jersey U.S. District Court Judges Brian R. Martinotti and Judge Rukhsanah L. Singh appointed. Widlanski is joined by Mark Pifko of Baron & Budd, P.C.; Dave Buchanan of Seeger Weiss; and Brandon Bogle of Levin Papantonio as Co-Lead Counsel for the Self-Funded Payer Track.

As of the beginning of the month, 119 cases were pending in the MDL.

Read Related: '10's of Billions at Stake': Insulin Case Gets OK with Miami Attorney in Lead

The 'Big 3'

The lawsuit against the nation’s three largest pharmacy benefits managers, which have been coined the "Big 3,"—Optum Rx, Caremark, and Express Scripts— and their respective group purchasing organizations is the result of a wide-ranging investigation into distortions in the pharmaceutical distribution chain and their effects on patient access to insulin, a lifesaving drug relied on by 8.4 million Americans, according to the American Diabetes Association.

"Tens of billions are at stake," Widlanski said earlier. "This is a case that goes back 20 years, so the damages are substantial."

"Adding fuel to the fire, the FTC released on Tuesday its second interim staff report on drug middlemen," said Kozyak Tropin & Throckmorton partner Tal Liftshitz who is also involved in the case. "The report, which confirms that pharmacy benefit managers charge major markups for critically important life-saving drugs, will further elevate public awareness and inevitably lead to more lawsuits."

New target identified

While the report and lawsuit are separate entities, attorneys think the findings will assist the plaintiffs.

“The FTC staff’s second interim report finds that the three major pharmacy benefit managers hiked costs for a wide range of lifesaving drugs, including medications to treat heart disease and cancer,” said FTC Chair Lina M. Khan. “The FTC should keep using its tools to investigate practices that may inflate drug costs, squeeze independent pharmacies, and deprive Americans of affordable, accessible healthcare—and should act swiftly to stop any illegal conduct.”

The report alleges the "Big 3" PBMs are charging enormous markups on dozens of lifesaving drugs. “We also found that this problem is growing at an alarming rate, which means there is an urgent need for policymakers to address it,” said Hannah Garden-Monheit, Director of the FTC’s Office of Policy Planning.

The staff’s latest report builds on a report issued by FTC staff in July 2024, which found that pharmacies affiliated with the "Big 3" PBMs received 68% of the dispensing revenue generated by specialty drugs in 2023, up from 54% in 2016. The latest report analyzes a broader set of specialty generic drugs compared to two specialty generic drugs analyzed in the July report and finds that the "Big 3" PBMs impose significant markups on a wide array of specialty generic drugs.

On New Year's Eve, in New Jersey federal court, another private company launched a lawsuit. Braman Motors Inc. v. Eli Lilly and Co., Novo Nordisk Inc., includes nearly 20 defendants, in addition to the "Big 3" PBMs and an additional target: Rebate aggregators.

"Notably, in recent months, the case expanded to include rebate aggregators, which the PBMs allegedly created to capture and conceal manufacturer payments that would otherwise need to be passed through to employers and health plans," Lifshitz explained. "By naming these rebate aggregators as defendants, our clients are shining a light on a practice they believe betrays their trust and unnecessarily inflates health care costs."

Profits over people was a reoccurring theme in the latest complaint, filed by the Miami-based Braman Motors and its subsidiaries, which may lead to similar litigation, attorneys speculate.

"Defendants engineered [price increases] to exponentially increase their profits at the expense of payors like Plaintiff," Braman said in the complaint. "Plaintiff has been overcharged millions of dollars during the relevant period as a direct result of the Insulin Pricing Scheme."

Braman alleges that the defendants violated the Racketeer Influenced and Corrupt Organizations Act, the Florida Deceptive and Unfair Trade Practices Act, and Florida common law by engaging in a pricing scheme.