Placement: Consent Agenda
Action Requested: Motion / Vote
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Approve Insulin Pricing Litigation Retainer Agreement between the City of Port St. Lucie and The Ferraro Law Firm
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Submitted By: Richard Shiller, Deputy City Attorney, City Attorney’s Office
Strategic Plan Link: The City’s Mission to provide exceptional municipal services.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Charles Snyderman, Paralegal, City Attorney’s Office.
2. Parties: City of Port St. Lucie and The Ferrao Law Firm.
3. Purpose: To seek reimbursement of the costs incurred for the overpayment of insulin products for members covered under the City’s self-funded health insurance plan as a result of price fixing schemes between pharmaceutical manufacturers and pharmacy benefit managers.
4. New/Renewal/Modified: New
5. Duration: The duration of litigation is unknown.
6. Benefits to Port St. Lucie: To obtain money damages for the exorbitant costs of insulin products over the last 20 years.
7. Cost to Port St. Lucie (Annual and Potential): Initially there will be no costs. The Ferraro Law Firm will advance all litigation expenses necessary to prosecute the litigation. In consideration, the City would agree to pay 25% of any total gross recovery in favor of the City. There is no fee to the Ferraro Law Firm if there is no recovery.
Presentation Information: N/A.
Staff Recommendation: Move that the Council approve the Insulin Pricing Litigation Retainer Agreement with the Ferraro Law Firm.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve the Insulin Pricing Litigation Retainer Agreement with the Ferraro Law Firm
2. Move that the Council not approve the Insulin Pricing Litigation Retainer Agreement and provide staff with direction.
Background:
According to the American Diabetes Association, more than 38 million Americans are afflicted with diabetes. Over 8 million American diabetics are insulin dependent. Despite relatively few technological innovations, the price of insulin in the US has steadily and dramatically increased. In just the last 20 years, the list price of insulin has grown by up to 1000%.
The escalating cost of insulin has impacted accessibility for patients and imposed significant additional costs on self-funded payors and government health care plans. Now, insulin manufacturers and PBMs are facing lawsuits for artificially inflating the price of insulin at the expense of individuals and families in need of essential care.
The price of insulin is effectively controlled by just three companies: Novo Nordisk, Eli Lilly, and Sanofi. Similarly, nearly 90% of the pharmacy benefit managing market for insulin is controlled by three companies - Express Scripts, CVS Caremark, and OptumRx. These companies face allegations of engineering price increases on insulin through an opaque, conspiratorial kickback scheme that has exponentially increased their profits at the expense of payors.
Issues/Analysis: N/A.
Financial Information: Per the retainer agreement, the law firm’s fee is contingency-based. Law firm would be paid a fee of 25% of any total gross recovery in favor of the City (e.g., compromise, settlement, or judgment).
Special Consideration: N/A.
Location of Project: N/A.
Attachments:
1. Insulin Litigation Retainer Agreement.
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 23348-01.
Legal Sufficiency Review:
Reviewed by Richard Shiller, Deputy City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.