Upstate New York Health Provider Asks Appeals Court to Revive Insulin Price-Fixing Suit

A community health care provider in upstate New York urged a federal appeals court on Friday to reinstate antitrust claims against four major pharmaceutical companies, alleging they coordinated to limit discounted insulin availability in violation of federal competition laws.

According to Reuters, Mosaic Health, joined by Central Virginia Health Services, is seeking to revive a dismissed lawsuit claiming that drug manufacturers Eli Lilly, Sanofi-Aventis, AstraZeneca, and Novo Nordisk conspired to restrict access to discounts offered under the federal 340B Drug Pricing Program. The plaintiffs argue that the companies’ similar policies, rolled out during the latter half of 2020, amount to coordinated anticompetitive behavior targeting contract pharmacies.

During oral arguments before the Second Circuit Court of Appeals, Judge Maria Araújo Kahn questioned whether the alleged timing and alignment of the companies’ policy shifts might support a plausible inference of conspiracy — particularly after their prior lobbying efforts to alter the 340B program failed.

“Isn’t it plausible that they came up with this plan to engage in slightly different conduct to achieve what they sought to achieve through their lobbying efforts that became unsuccessful,” Kahn asked during the hearing, which she attended via video, per Reuters.

The underlying dispute centers on whether the drugmakers’ individual decisions to stop shipping certain 340B-eligible insulin products to contract pharmacies were made independently or as part of a broader scheme to suppress discount access — thereby driving up profits through higher reimbursements.

Representing Mosaic Health, attorney Brian Feldman argued that although each defendant adopted slightly different exceptions to their restrictions, they all implemented the same overarching policy that limited the ability of covered entities to acquire discounted insulin. Feldman asserted that this constituted more than coincidence. “The conspiracy alleged is to decimate contract pharmacy sales, which all of them achieved,” he told the court.

The lawsuit, initially filed in 2021, sought certification of a nationwide class involving thousands of healthcare entities that participate in the 340B program. The plaintiffs also aimed to secure treble damages under federal antitrust law, citing millions of dollars in lost revenue and increased drug costs.

Related: Michigan Sues Express Scripts, Prime Therapeutics for Alleged Price-Fixing Scheme

In 2024, U.S. District Judge Elizabeth Wolford of the Western District of New York dismissed the amended complaint, ruling that Mosaic and its co-plaintiff had failed to show sufficient evidence of a coordinated scheme. She held that the timing and nature of the drugmakers’ policy changes were too varied to constitute “parallel conduct” under the Sherman Antitrust Act.

On appeal, Mosaic contends that Judge Wolford applied too narrow a standard and overlooked the broader pattern of behavior. In a legal brief, the plaintiffs asserted that the synchronized actions by the four manufacturers — all dominant in the diabetes market — suggested deliberate coordination. “There was nearly zero chance that defendants only randomly became the first movers out of 1,000,” they argued.

The pharmaceutical companies reject that conclusion. In their own filing, the defendants maintained that their decisions were made independently in response to the complex dynamics of the drug market, not in concert with each other. “The sequence of alleged events demonstrates defendants acted independently,” the companies stated. “Plaintiffs’ far-fetched theory is implausible on its face.”

According to Reuters, the companies also emphasized that each policy change differed in both scope and timing — pointing to one manufacturer being the “initial mover” and others following months later with varied restrictions.

The three-judge panel hearing the case — all appointed by President Joe Biden — included Judges Alison Nathan and Myrna Pérez, in addition to Judge Kahn. The court did not offer a timeline for when it will issue a decision.

The 340B Drug Pricing Program was established by Congress to provide discounted medications to healthcare providers that serve vulnerable populations.

Source: Reuters