Federal District Court Rochester
There will be a federal district court hearing July 20 in Rochester, N.Y., in two health centers' 340B-related antitrust suit against insulin and diabetes drug makers.

Health Centers’ Antitrust Case Over 340B Contract Pharmacy Limits Will be Argued July 20

A once-dead lawsuit that accuses drug makers of colluding to deny 340B pricing on insulin and diabetes drugs shipped to contract pharmacies is going to be heard July 20 in federal district court in Rochester, N.Y.

Chief Judge Elizabeth Wolford of U.S. District Court for the District of Western New York last week ordered that oral arguments be held on two community health centers’ motion to be allowed to file an amended antitrust complaint against AstraZeneca, Lilly, Novo Nordisk, and Sanofi.

Upstate New York health center Mosaic Health sued the four companies in July 2021. Virginia health center Central Virginia Health Services joined the suit that October. Their original complaint alleged that the four companies announced and imposed their conditions on 340B pricing in the contract pharmacy sphere “in near lockstep” between July 2020 and January 2021. Mosaic and CVHS allege that the companies coordinated their 340B pricing actions after the failure of joint lobbying in mid 2020 to influence federal 340B policy.

“It is likely during that joint lobbying effort, defendants planned their restrictions on contract pharmacy 340B drug discounts as a fallback position if their lobbying efforts failed,” the original complaint said.

Wofford dismissed the suit in September 2022, holding that the health centers “failed to plausibly allege” that the four companies illegally colluded to deny 340B pricing on insulin and other diabetes medicines, in violation of federal and state laws. The companies’ 340B contract pharmacy policies are too “different in their particulars, their timing, and their outcomes” to support a finding of parallel conduct for purposes of federal antitrust law, she said.

Wofford, however, let the health centers file an amended complaint. She said she was doing so because she could not, based on the record in the case, “rule out the possibility that plaintiffs could successfully plead their claims.”

The health centers filed their amended complaint on Oct. 3, 2022. The four companies filed their response on Oct. 27, 2022. The health centers’ new complaint, the companies said, did “nothing to remedy” their original complaint’s defects. The health centers filed a reply brief on Nov. 3, 2022, arguing that the claims they made in their amended complaint weren’t futile.

The only other activity in the case between then and Wofford’s May 17 scheduling order was a filing Feb. 3 by the four companies. It told the judge about the U.S. Third Circuit Court of Appeals’ Jan. 30 decision striking down and setting aside federal health officials’ determinations that AstraZeneca, Novo Nordisk, and Sanofi’s 340B contract pharmacy policies violated the 340B statute. Congress, the appeals court said, did not require manufacturers to deliver 340B-purchased drugs to an unlimited number of contract pharmacies.

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