156 F.4th 68
2d Cir.2025Background
- Mosaic Health, Inc. and Central Virginia Health Services, Inc., operators of safety-net clinics, filed a class action alleging that four drug manufacturers (Sanofi-Aventis, Eli Lilly, Novo Nordisk, AstraZeneca) engaged in a horizontal price-fixing conspiracy to limit drug discounts available under the federal Section 340B Drug Discount Program, impacting low-income patients’ access to diabetes medications.
- The plaintiffs claimed that defendants acted in parallel by imposing similar restrictions on the 340B discounts for drugs sold to contract pharmacies, collectively reducing discounted sales and harming the clinics financially.
- The alleged conduct began after defendants’ joint lobbying efforts to limit the 340B program legislatively failed; they subsequently adopted similar policies restricting or eliminating discounts within a short period and through overlapping contacts with the same lobbying firms and trade association.
- The district court dismissed the plaintiffs’ first amended complaint and denied leave to file a second amended complaint, finding insufficient allegations of parallel conduct or a plausible conspiracy (no “plus factors”).
- Plaintiffs appealed, challenging both the dismissal and the denial of leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sherman Act - Standing/Bar under Astra | Astra does not bar antitrust claims; not seeking to enforce 340B statute directly | Astra bars claims because plaintiffs lack right to sue over 340B pricing | Astra does not bar the antitrust claims; plaintiffs may proceed |
| Sherman Act - Standing/Bar under Illinois Brick | Illinois Brick does not preclude claims for lost revenue and injunctive relief | Plaintiffs are indirect purchasers and lack standing | Illinois Brick does not preclude standing here |
| Pleading sufficiency: Parallel conduct | Defendants imposed 340B restrictions in similar manner, timing, effect | Conduct not parallel; actions too dissimilar | Plaintiffs sufficiently alleged parallel conduct |
| Pleading sufficiency: Plus factors | Common motive, actions contrary to self-interest, high interfirm communications | Lacked facts to plausibly infer conspiracy | Plaintiffs sufficiently pled plus factors for conspiracy |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (sets the plausibility standard for pleading an antitrust conspiracy)
- Astra USA, Inc. v. Santa Clara Cnty., 563 U.S. 110 (U.S. 2011) (limits private rights of action under Section 340B but not bar on antitrust claims)
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (U.S. 1977) (reviewed the scope of who may sue for antitrust overcharge claims)
- Anderson News, L.L.C. v. American Media, Inc., 680 F.3d 162 (2d Cir. 2012) (articulated standards for pleading conspiracy at motion to dismiss stage)
- United States v. Apple, Inc., 791 F.3d 290 (2d Cir. 2015) (discussed plus factors and horizontal conspiracy in antitrust law)
- Mayor & City Council of Baltimore v. Citigroup, Inc., 709 F.3d 129 (2d Cir. 2013) (plausibility and pleading standard for antitrust conspiracy)