Sanofi, Lilly, Novo Nordisk, AstraZeneca Must Face Price-Fixing Suit, Court Rules

A three-judge panel from the 2nd U.S. Circuit Court of Appeals in New York unanimously reversed a lower court’s dismissal, allowing the proposed class action brought by two federally funded health centers — Mosaic Health and Central Virginia Health Services — to move forward. The case centers around the federal 340B program, which requires drugmakers to offer discounted medications to safety-net providers serving low-income communities.

Per Reuters, the clinics allege that the four drug companies coordinated in 2020 to limit access to discounted diabetes medications when those drugs were dispensed through community pharmacies contracted by the clinics. The appeals court found the allegations sufficient to proceed, noting that the defendants are direct competitors with significant control over the diabetes drug market — making such coordination plausible.

Circuit Judge Myrna Pérez, writing for the panel, noted that the alleged restrictions would be “easy to coordinate and maintain,” a conclusion supported by fellow Circuit Judges Alison Nathan and Maria Araújo Kahn.

In response to the ruling, Sanofi said it is reviewing the court’s decision and considering next steps. Novo Nordisk dismissed the allegations as “meritless” and said it would continue to defend itself. Eli Lilly echoed that position, stating it “strongly disagrees” with the decision to allow the case to proceed and characterized its policies as lawful and independently developed to combat what it described as fraud in the 340B program. AstraZeneca did not immediately comment, Reuters reported.

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The plaintiffs claim that the companies collectively reaped billions of dollars in additional profits by curtailing discounts — profits that came, they argue, at the expense of healthcare providers and the patients they serve.

Mosaic Health operates 22 clinics in New York, while Central Virginia Health Services manages 18 clinics across Virginia. The lawsuit, filed in 2021, seeks damages for lost revenue resulting from the alleged restrictions.

Attorney Brian Feldman, representing the health centers, described the appeals court decision as a “watershed moment” and said the plaintiffs are eager to pursue justice on behalf of safety-net providers.

According to Reuters, the drugmakers deny any wrongdoing and maintain that their policies were designed to protect the integrity of the 340B program. They argue the lawsuit attempts to penalize them for enforcing safeguards that are legally permitted and necessary.

Drug manufacturers must participate in the 340B program to remain eligible for reimbursements under Medicare and Medicaid. The case is Mosaic Health Inc v. Sanofi-Aventis U.S. LLC, 2nd U.S. Circuit Court of Appeals, No. 24-598.

Source: Reuters