City Files Organized Crime Charges Against Big Three PBMs, Cigna Proves PBM Clients Are Sticky (Even When Margins Aren't), and Novo's Scramble for Metsera Gets Messy

Hey all,

Happy Thursday! The supposedly untouchable pillars of healthcare are suddenly looking remarkably touchable. Novo Nordisk's once-dominant GLP-1 franchise is trailing competitors as sales miss expectations, PBM rebate cash machines are sputtering as Cigna pivots to service fees, and Philadelphia just filed a RICO suit accusing the Big Three of colluding with opioid manufacturers like common mobsters. Turns out invincibility lasts right up until competition intensifies, margins compress, and prosecutors start asking uncomfortable questions about all those billions in revenue.

Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(HEALTH CARE un-covered) Philadelphia's RICO Lawsuit Against PBMs

Philadelphia has filed a landmark RICO lawsuit against three major pharmacy benefit managers—Cigna's Express Scripts, CVS's Caremark, and UnitedHealth's Optum Rx—alleging they colluded with opioid manufacturers like Purdue Pharma to boost opioid sales while concealing their role in the addiction crisis. This bold legal action, likened to prosecuting organized crime, accuses the PBMs of exploiting prior authorization systems to extract kickbacks, flooding the city with mail-order opioids, and profiting off taxpayer-funded contracts while worsening public health. With thousands of overdose deaths and billions in corporate revenues at stake, the case could signal a broader reckoning for PBMs across the country—after all, if this RICO suit sticks, there might be a whole punch card’s worth coming. Full Article

(BenefitsPro) Cigna Stop-Loss and PBM Margins

Cigna has successfully stabilized its stop-loss insurance business through significant rate hikes, while its pharmacy benefit manager (PBM) segment faces tighter margins for the next two years. Despite pricing pressures, nearly all PBM clients—representing $90 billion in annual revenue—are sticking with Cigna as it shifts from rebate-based pricing to a service-fee model. But transforming a PBM from rebates to value-based pricing is like trying to teach an old dog not to charge hidden fees—it might take a few treats and a miracle. Full Article.

(Endpoints News) Novo Nordisk's Q3 Earnings and Metsera Bid

Novo Nordisk’s disappointing Q3 results, with sales falling 2% below Wall Street expectations, underscore its urgent need to secure Metsera’s obesity pipeline as competition with Eli Lilly intensifies. Despite cutting underperforming assets and accepting a Medicare price cap on key GLP-1 drugs under the Inflation Reduction Act, the company’s narrowed profit outlook and reliance on expanding cash channels point to mounting pressure to regain market ground. Novo’s acquisition of Metsera remains in limbo as Pfizer considers a counterbid, with a court hearing set to determine next steps. Full Article.