Illinois Attorney General Kwame Raoul has jumped into court against makers and sellers of insulin, seeking potentially massive payouts from pharmaceutical companies accused of over-pricing their products.
And accompanying Raoul’s office in the case will be a cadre of trial lawyers who have been previously accused of unethically attempting to use the authority of the attorney general’s office to secure information to aid other lawsuits.
In early December, Raoul’s office filed suit in Cook County Circuit Court against a group of pharmaceutical manufacturers, including Eli Lilly, Novo Nordisk and Sanofi-Aventis. Those three companies are estimated to dominate the market for insulin worldwide.
The lawsuit also takes aim at other so-called pharmacy benefit managers, or PBMs. These include pharmaceutical sellers Caremark CVS, Express Scripts and Optum RX.
The attorney general’s lawsuit asserts the companies have worked together to essentially corner the market for insulin, and then raise the price of the diabetes treatments by 1,000% or more since the late 1990s, from $20 per unit to as much as $700 per unit today.
The complaint asserts these price increases have occurred, even though “nothing about these medications has changed” since the late 1990s.
The lawsuit asserts the price increases have harmed both patients who use the insulin drugs, and Illinois’ state health care system, by forcing all involved to overpay for the medications.
The lawsuit asks the court to order the companies to disgorge their profits, potentially dating back to 2003, and award the state $50,000 for every “deceptive or unfair act or practice” in the past two decades.
The state, however, would not be the only party taking a cut of whatever the defendant pharmaceutical makers and sellers may ultimately pay from the lawsuit.
Raoul’s complaint is co-signed by a group of trial lawyers, most of whom have also helped lead lawsuits against these same defendants, on behalf of other states.
These include Joanne Cicala, Josh Wackerly and R. Johan Conrod, of The Cicala Law Firm, of Dripping Springs, Texas; Edwin S. Gault Jr., of Forman Watkins & Krutz, of Jackson, Mississippi; James F. Clayborne, of Clayborne & Wagner, of Belleville; W. Lawrence Deas, of Liston Deas PLLC, of Jackson; and Matthew C. McDonald, of David Nutt & Associates, of Ridgeland, Mississippi.
Clayborne served in the Illinois State Senate from 1997-2018. He served with Raoul in the Senate and as a member of the Black Legislative Caucus for 14 years.
The state’s case against the PBMs has been the subject of legal wrangling since before the lawsuit was filed, centered on the state’s partnership with Cicala and her colleagues.
This fall, the PBM companies filed a motion in Cook County court, demanding Raoul’s office explain subpoenas issued in his office’s name in June by Cicala and her colleagues.
The subpoenas demanded the PBM companies turn over a host of documents and other information concerning their business practices, dating back to 2003.
The companies said they did not dispute Raoul’s authority as attorney general to demand such information.
However, they asked the judge to disallow the subpoenas because they demanded the companies return the information not to the attorney general’s office, but to Cicala and six of her fellow private trial lawyers, who had been deputized by Raoul to serve as so-called “special assistant attorneys general.”
According to the filing, Cicala and her colleagues were retained under a contract that “provides for a contingency fee of up to 25% of any ‘recoveries’ obtained for the state.” So, while the state had not yet filed suit against the companies, they noted the contingency retention agreement could allow Cicala and her colleagues to “seek millions in damages.”
The companies balked at the direction to turn over the information to Cicala and her colleagues. They noted Cicala and her colleagues are leading lawsuits against those same companies in court elsewhere, representing other states and private clients in potentially massive actions worth many millions of dollars.
The companies said they feared Cicala and her colleagues would use any information they turn over to Raoul’s office against them in those other lawsuits.
The pharmacies asked the court to disqualify Cicala and the other trial lawyers from continuing in the case.
“… It is unethical for Cicala, Wackerly, Gault, Deas, Liston, and McDonald … to investigate (these companies) as Special Assistant Attorneys General while simultaneously suing (the companies) in other jurisdictions on behalf of various private and public clients,” the companies said in a motion filed Oct. 7.
The companies said they expressed their concerns to Raoul’s office about the alleged conflict of interest. They noted they believed the continued partnership between the attorney general’s office and Cicala and her colleagues likely violated Illinois Rule of Professional Responsibility 1.11 (c) which they say forbids lawyers who serve as “a public officer or employee” from using information they gained while in that service to advance the interests of private clients.
They further assert the arrangement with Cicala and her colleagues violates Illinois state law, which forbids those in “government service” from using “insider information” for their own personal benefit. In this case, they said, the lawyers could use the information from the subpoenas “to litigate cases in which they have a financial incentive.”
The companies note Cicala alone has filed more than 50 lawsuits against the companies over the companies’ profits and practices related to the distribution of insulin and opioid medications. And Cicala’s colleagues are working with her on at least two large cases, representing the states of Mississippi and Arkansas in lawsuits against the companies related to insulin prices.
“In the conflicted lawyers’ hands, the … Subpoenas are not merely investigative tools but are instead vehicles for obtaining discovery that could benefit their private practices and other clients elsewhere,” the companies said in October. “The ethical concerns do not turn on the conflicted lawyers’ intentions (good or bad.) It is enough that the conflicted lawyers could use confidential information gained through the Subpoenas to advance separate litigation against (the companies.)
“Applicable rules require disqualification.”
However, Raoul’s office initially responded to their concerns with the lawsuit asking the court to order them to obey Cicala’s document disclosure demands.
The companies said that response from Raoul demonstrated a “troubling” official position that the attorney general welcomes private lawyers to use his office’s power to gain information “without abiding by the ethical rules that apply to government lawyers.”
If Raoul refused to remove Cicala and her colleagues from the investigation, the companies asked the court to dismiss the subpoenas.
In November, a spokesperson for Raoul said the attorney general believed the companies’ claims in the case were “baseless” and reflected “a misunderstanding” of state law.
Raoul’s office never filed a formal response in court to the companies’ disqualification demand or responding to their accusations.
Rather, the attorney general's office filed its lawsuit on Dec. 2, together with Cicala and the other private trial lawyers, now also including Clayborne.
Raoul’s office then moved on Dec. 5 to dismiss the subpoenas, without explanation.
In response, attorneys for the PBMs said they confirmed that the trial lawyers had “received confidential government information related to the PBMs as part of the State’s investigation.”
They said they could yet attempt once more, as part of their defense against the state’s lawsuit, to disqualify “those and other conflicted counsel.”
The PBM companies have been represented in the action by attorneys Elizabeth Z. Meraz, Patricia Brown Holmes, Beth Herrington and Jason R. Scherr, and others with the firms of Nixon Peabody, of Chicago; Riley Safer Holmes & Cancila, of Chicago; Morgan Lewis & Bockius, of Chicago and Washington, D.C.; Alston & Bird, of Atlanta, San Francisco and Charlotte, North Carolina; and Williams and Connolly, of Washington, D.C.
The Attorney General’s office did not respond to a request from The Cook County Record for comment about the matter.