Legal scrutiny rising for algorithmic pricing in health care
The antitrust implications of algorithmic pricing tools have become a significant area of focus for both private plaintiffs and government enforcers in recent years, tasking courts with determining what kind of use of an algorithmic pricing tool might state a claim under the Sherman Act, as well as what mode of antitrust analysis to apply to these types of cases. While many algorithmic price fixing cases being litigated involve the residential real estate and hotel industries, similar allegations against the health care industry are now gaining traction.
In re MultiPlan Health Insurance Provider Litigation, both a proposed class of plaintiff health care providers and direct action plaintiffs have alleged that health care data company MultiPlan and over 700 health insurers engaged in a price fixing conspiracy to underpay out-of-network health care providers by outsourcing rate-setting to one of MultiPlan's proprietary algorithms. In a June 2025 opinion, the court dismissed allegations of horizontal price fixing but found that plaintiffs sufficiently alleged a plausible horizontal hub-and-spoke agreement to fix prices for out-of-network service payments. Notably, the court found that defendants do not have to use the algorithm in identical ways for their use to be considered parallel conduct, as an agreement to fix prices within a below-market range through use of an algorithm suffices, and parallel conduct could still exist even if defendants have an ability to reject MultiPlan's rate. A similar lawsuit was brought against health care data company Zelis in the District of Massachusetts.
Related issues are also being litigated in the pharmacy reimbursement context. Independent pharmacies and non-profit associations of such pharmacies brought a suit against GoodRx, alleging that GoodRx conspired with four pharmacy benefit managers to suppress prices paid to independent pharmacies for generic drugs by outsourcing pharmacy reimbursement rate decisions to GoodRx's pricing algorithm. The plaintiffs in this case allege that defendants' conduct is a horizontal price-fixing arrangement that is per se illegal under the Sherman Act. The litigation is currently underway in U.S. District Court in Rhode Island.
As courts continue to grapple with how to analyze algorithmic price fixing cases across all industries, the plaintiffs' bar is actively testing this new theory of liability against new actors. We expect continued scrutiny and additional cases in the health care sector, particularly where pricing algorithms are used in ways that could be characterized as standardizing or constraining independent pricing decisions.

