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A federal district judge in Rochester, N.Y., has dismissed two community health centers’ antitrust suit against insulin manufacturers over the companies’ 340B pricing policies.

Judge Dismisses 340B Contract Pharmacy-Related Antitrust Claims Against Insulin Manufacturers

A federal district judge has dismissed two community health centers’ federal and state antitrust claims against four insulin and diabetes drug manufacturers over the companies’ denials of 340B pricing when covered entities use contract pharmacies.

Chief Judge Elizabeth Wolford of U.S. District Court for the District of Western New York on Sept. 2 agreed with AstraZeneca, Lilly, Novo Nordisk, and Sanofi that New York state health center Mosaic Health and Virginia-based Central Virginia Health Services’ (CVHS) “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.

Mosaic and CVHS “have not plausibly alleged the existence of a conspiracy,” Wolford ruled. She also dismissed the health centers’ claims that the four companies unjustly enriched themselves in violation of the laws of 47 states and District of Columbia.

Wolford, however, gave Mosaic and CVHS 30 days from the date of her decision to file an amended complaint against the companies. 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.”

“We are pleased the court agreed that the allegations lack merit,” a Lilly spokesperson said yesterday. Spokespersons for AstraZeneca, Novo Nordisk, and Sanofi did not respond to requests for comment.

Brian Feldman, an attorney for Mosaic and CVHS, yesterday said, “We disagree with the court’s decision. Plaintiffs are committed to this action and are considering their options for amendment or appeal.”

Mosaic and CVHS’s lawsuit differs from the eight cases in which drug manufacturers are challenging the U.S. Health and Human Services Department’s determinations that the companies’ restrictions on 340B pricing involving contract pharmacy arrangements violate the 340B statute. Six of the cases—those involving AstraZeneca, Lilly, Sanofi, Novo Nordisk, Novartis, and United Therapeutics—are currently before federal appeals courts.

The U.S. Supreme Court ruled in 2011 that covered entities may not sue drug manufacturers under the 340B statute for allegedly charging them above 340B ceiling prices. With that avenue closed, Mosaic and CVHS instead sued AstraZeneca, Lilly, Novo Nordisk, and Sanofi for allegedly violating federal and state antitrust laws.

Wolford said in her decision that Mosaic and CVHS’ “own allegations make clear that defendants adopted four distinct policies regarding contract pharmacies and 340B drug discounts over the course of several months in mid-to-late 2020.”

“There is no plausible argument that these disparate policies are ‘substantially similar’ so as to constitute parallel conduct for purposes of federal antitrust law,” she said. “They are different in their particulars, their timing, and their outcomes.”

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