The federal district court for western New York is hearing two 340B health centers' antitrust lawsuit against insulin and diabetes drug makers.

N.Y. and Va. Health Centers Say Discovery Should Continue in their Novel 340B-Related Federal Lawsuit

New York State and Virginia health centers asked a federal district judge on Monday to deny four insulin and diabetes drug manufacturers’ motion to pause fact-finding in the health centers’ antitrust suit stemming from the companies’ 340B contract pharmacy policies.

The companies—AstraZeneca, Lilly, Novo Nordisk, and Sanofi—asked U.S. District Judge Elizabeth Wolford on Nov. 24 to stay discovery in the case pending Wolford’s decision on their Nov. 16 motion to dismiss the antitrust suit filed by health centers Mosaic Health of upstate New York and Central Virginia Health Services (CVHS).

Mosaic and CVHS are not going after the four companies for violating the 340B statute. They allege instead that the four companies conspired to retract 340B discounts for drugs dispensed by contract pharmacies, in violation of federal and state antitrust laws and state unjust enrichment laws.

The companies say the health centers lack standing to sue and offer no direct or circumstantial evidence of conspiracy to restrain trade. They asked Wolford to halt pre-trial exchange of information between the two side because, they said, their arguments for dismissal are strong and the legal process of discovery “would be particularly broad, burdensome, and expensive.”

Mosaic and CVHS countered this week that their case, not the drug manufacturers’, is exceptionally strong and unlikely to be dismissed. The health centers said they have made only very limited requests for documents, and that any delay in discovery “is a boon to defendants and will further injure plaintiffs, depriving them of much needed resources to fund care to their underserved patients.”

“Every day, defendants’ ongoing restrictions inflict serious financial harm on plaintiffs and similarly situated class members; and, every day, defendants profit from those restrictions,” the health centers argued.

The companies have until Dec. 27 to file a response.