Case 6:21-cv-06507 Document 1 Filed 07/30/21 Page 1 of 77
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`HARTER SECREST & EMERY LLP
`HARTER SECREST & EMERY LLP
`1600 Bausch and Lomb Place
`1600 Bausch and Lomb Place
`Rochester, NY 14604-2711
`
`Rochester, NY 14604-2711
`Telephone No. 585.232.6500
`Telephone No. 585.232.6500
`Facsimile No. 585.232.2152
`Facsimile No. 585.232.2152
`
`CAFFERTY CLOBES MERIWETHER &
`CAFFERTY CLOBES MERIWETHER &
`SPRENGEL LLP
`SPRENGEL LLP
`205 N. Monroe Street
`205 N. Monroe Street
`Media, Pennsylvania 19063
`Media, Pennsylvania 19063
`Telephone No. 215.864.2800
`Telephone No. 215.864.2800
`
`UNITED STATES DISTRICT COURT FOR THE
`UNITED STATES DISTRICT COURT FOR THE
`WESTERN DISTRICT OF NEW YORK
`WESTERN DISTRICT OF NEW YORK
`
`MOSAIC HEALTH, INC., individually and on behalf of
`MOSAIC HEALTH, INC., individually and on behalf of
`all those similarly situated,
`all those similarly situated,
`
` Plaintiffs,
`Plaintiffs,
`
` vs.
`VS.
`
`SANOFI-AVENTIS U.S., LLC, ELI LILLY AND
`SANOFI-AVENTIS U.S., LLC, ELI LILLY AND
`COMPANY, LILLY USA, LLC, NOVO NORDISK
`COMPANY, LILLY USA, LLC, NOVO NORDISK
`INC., and ASTRAZENECA PHARMACEUTICALS
`INC., and ASTRAZENECA PHARMACEUTICALS
`LP,
`LP,
`
` Defendants.
`Defendants.
`
`COMPLAINT
`COMPLAINT
`
`Jury Trial Demanded
`Jury Trial Demanded
`
`Plaintiff Mosaic Health, Inc., on behalf of itself and all those similarly situated, by its
`Plaintiff Mosaic Health, Inc., on behalf of itself and all those similarly situated, by its
`
`counsel alleges as follows:
`counsel alleges as follows:
`
`INTRODUCTION
`INTRODUCTION
`
`1.
`1.
`
`This case challenges coordination by four drug companies to boost their profits at
`This case challenges coordination by four drug companies to boost their profits at
`
`the expense of the safety-net hospitals and clinics that care for patients who have nowhere else to
`the expense of the safety-net hospitals and clinics that care for patients who have nowhere else to
`
`turn. Those four drug companies—defendants here—should directly compete with each other.
`turn. Those four drug companies—defendants here—should directly compete with each other.
`
`Yet, instead of competing for business, they worked together to boost their profits by
`Yet, instead of competing for business, they worked together to boost their profits by
`
`coordinating to retract a long-standing discount for safety-net hospitals and clinics. That
`coordinating to retract a long-standing discount for safety-net hospitals and clinics. That
`
`coordination allowed each defendant to individually avoid competitive pressure and prevent
`coordination allowed each defendant to individually avoid competitive pressure and prevent
`
`individual market share losses, while restricting safety-net hospitals’ abilities to deliver robust
`individual market share losses, while restricting safety-net hospitals' abilities to deliver robust
`
`9713568_3
`9713568_3
`10222420_1
`10222420_1
`
`

`

`Case 6:21-cv-06507 Document 1 Filed 07/30/21 Page 2 of 77
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`and affordable healthcare options to patients. That horizontal agreement was a per se violation
`and affordable healthcare options to patients. That horizontal agreement was aper se violation
`
`of state and federal antitrust laws. This antitrust class action seeks injunctive and compensatory
`of state and federal antitrust laws. This antitrust class action seeks injunctive and compensatory
`
`relief for the safety-net hospitals and clinics harmed by the drug companies’ anti-competitive
`relief for the safety-net hospitals and clinics harmed by the drug companies' anti-competitive
`
`agreement.
`agreement.
`
`2.
`2.
`
`The defendants here are four drug companies that dominate three key markets for
`The defendants here are four drug companies that dominate three key markets for
`
`diabetes treatments. They are: Sanofi-Aventis U.S., LLC (Sanofi); Eli Lilly and Company and
`diabetes treatments. They are: Sanofi-Aventis U.S., LLC (Sanofi); Eli Lilly and Company and
`
`Lilly USA, LLC (together, Eli Lilly); Novo Nordisk Inc. (Novo Nordisk); and AstraZeneca
`Lilly USA, LLC (together, Eli Lilly); Novo Nordisk Inc. (Novo Nordisk); and AstraZeneca
`
`Pharmaceuticals LP (AstraZeneca) (collectively, Defendants). They dominate the lucrative
`Pharmaceuticals LP (AstraZeneca) (collectively, Defendants). They dominate the lucrative
`
`diabetes markets for: (i) rapid-acting analog insulins; (ii) long-acting analog insulins; and
`diabetes markets for: (i) rapid-acting analog insulins; (ii) long-acting analog insulins; and
`
`(iii) incretin mimetics. These markets account for billions of dollars of annual U.S. sales for
`(iii) incretin mimetics. These markets account for billions of dollars of annual U.S. sales for
`
`Defendants and, as such, are among the most important drug markets for the Defendants. At the
`Defendants and, as such, are among the most important drug markets for the Defendants. At the
`
`time their conspiracy began, Defendants faced no significant competition, apart from one
`time their conspiracy began, Defendants faced no significant competition, apart from one
`
`another, in these multi-billion dollar markets.
`another, in these multi-billion dollar markets.
`
`3.
`3.
`
`The discount that Defendants conspired to limit was a special discount offered to
`The discount that Defendants conspired to limit was a special discount offered to
`
`safety-net hospitals and clinics, which purchase drugs filled by their patients at retail pharmacies.
`safety-net hospitals and clinics, which purchase drugs filled by their patients at retail pharmacies.
`
`The discount is calculated by a mathematical formula codified at Section 340B of the Public
`The discount is calculated by a mathematical formula codified at Section 340B of the Public
`
`Health Service Act, 42 U.S.C. § 256b and is known as the 340B Drug Discount. For at least a
`Health Service Act, 42 U.S.C. § 256b and is known as the 340B Drug Discount. For at least a
`
`decade, drug companies offered the 340B Drug Discount to safety-net hospitals and clinics, not
`decade, drug companies offered the 340B Drug Discount to safety-net hospitals and clinics, not
`
`only for on-site use but also for purchase and distribution by retail pharmacies. Those
`only for on-site use but also for purchase and distribution by retail pharmacies. Those
`
`pharmacies, typically called contract pharmacies (Contract Pharmacies), have contracts with
`pharmacies, typically called contract pharmacies (Contract Pharmacies), have contracts with
`
`safety-net providers, which allows the providers to purchase drugs on their own accounts,
`safety-net providers, which allows the providers to purchase drugs on their own accounts,
`
`discounted with the 340B Drug Discount, to be delivered to and dispensed by the Contract
`discounted with the 340B Drug Discount, to be delivered to and dispensed by the Contract
`
`Pharmacies. Drug companies, including Defendants, have argued that their provision of 340B
`Pharmacies. Drug companies, including Defendants, have argued that their provision of 340B
`
`2 2
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`Case 6:21-cv-06507 Document 1 Filed 07/30/21 Page 3 of 77
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`Drug Discounts at Contract Pharmacies is voluntary, not mandated by law. But, for at least a
`Drug Discounts at Contract Pharmacies is voluntary, not mandated by law. But, for at least a
`
`decade, nearly all pharmaceutical companies, including Defendants, had offered safety-net
`decade, nearly all pharmaceutical companies, including Defendants, had offered safety-net
`
`providers drugs at 340B Drug Discounts for dispensing at Contract Pharmacies (Contract
`providers drugs at 340B Drug Discounts for dispensing at Contract Pharmacies (Contract
`
`Pharmacy 340B Drug Discounts). And, with all pharmaceutical competitors regularly offering
`Pharmacy 340B Drug Discounts). And, with all pharmaceutical competitors regularly offering
`
`Contract Pharmacy 340B Drug Discounts, patients benefitted, because safety-net hospitals and
`Contract Pharmacy 340B Drug Discounts, patients benefitted, because safety-net hospitals and
`
`clinics have been able to use savings from those discounts to expand healthcare services and
`clinics have been able to use savings from those discounts to expand healthcare services and
`
`lower healthcare costs for patients.
`lower healthcare costs for patients.
`
`4.
`4.
`
`But Defendants, in coordination with one other, departed from that industry-wide
`But Defendants, in coordination with one other, departed from that industry-wide
`
`practice beginning in the summer of 2020. After a decade of providing Contract Pharmacy 340B
`practice beginning in the summer of 2020. After a decade of providing Contract Pharmacy 340B
`
`Drug Discounts to safety-net providers through their Contract Pharmacies, Defendants—and
`Drug Discounts to safety-net providers through their Contract Pharmacies, Defendants—and
`
`Defendants alone among hundreds of leading pharmaceutical companies—suddenly, and in
`Defendants alone among hundreds of leading pharmaceutical companies-suddenly, and in
`
`coordination with one another, ceased the practice of offering Contract Pharmacy 340B Drug
`coordination with one another, ceased the practice of offering Contract Pharmacy 340B Drug
`
`Discounts. So, while nearly every pharmaceutical company in the country continued to offer
`Discounts. So, while nearly every pharmaceutical company in the country continued to offer
`
`Contract Pharmacy 340B Drug Discounts, Defendants, competitors with one another primarily as
`Contract Pharmacy 340B Drug Discounts, Defendants, competitors with one another primarily as
`
`to the lucrative diabetes medications described above, coordinated an historically unprecedented
`to the lucrative diabetes medications described above, coordinated an historically unprecedented
`
`change in 340B pricing practices nearly simultaneously.
`change in 340B pricing practices nearly simultaneously.
`
`5.
`5.
`
`Those harmed by those actions are safety-net hospitals and clinics, which provide
`Those harmed by those actions are safety-net hospitals and clinics, which provide
`
`healthcare services to low-income and underserved patients, funded in significant part through
`healthcare services to low-income and underserved patients, funded in significant part through
`
`savings from 340B Drug Discounts. The named plaintiff here is Mosaic Health, Inc. (Mosaic
`savings from 340B Drug Discounts. The named plaintiff here is Mosaic Health, Inc. (Mosaic
`
`Health) a federally qualified health center (FQHC) comprised of 22 safety-net clinics: Charlotte
`Health) a federally qualified health center (FQHC) comprised of 22 safety-net clinics: Charlotte
`
`School Based Health Center; Clinton Family Health; Edison Tech Community Health Center;
`School Based Health Center; Clinton Family Health; Edison Tech Community Health Center;
`
`Freddie Thomas Health Center; Genesee Health service; John James Audubon Health Center;
`Freddie Thomas Health Center; Genesee Health service; John James Audubon Health Center;
`
`Martin Luther King Jr. Health Center; Mosaic Health Rushville; Mosaic Health Mount Morris;
`Martin Luther King Jr. Health Center; Mosaic Health Rushville; Mosaic Health Mount Morris;
`
`3 3
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`Case 6:21-cv-06507 Document 1 Filed 07/30/21 Page 4 of 77
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`Mosaic Health Lyons; Mosaic Health Utica; Mosaic Health Utica Dental; Mosaic Health Ilion;
`Mosaic Health Lyons; Mosaic Health Utica; Mosaic Health Utica Dental; Mosaic Health Ilion;
`
`Newark Internal Medicine; Riedman Health Center; Unity Dental at St. Mary’s; Unity Dental at
`Newark Internal Medicine; Riedman Health Center; Unity Dental at St. Mary's; Unity Dental at
`
`Ridgeway; Unity Family Medicine at Orchard Street; Unity Family Medicine at St. Mary’s;
`Ridgeway; Unity Family Medicine at Orchard Street; Unity Family Medicine at St. Mary's;
`
`Wolcott Primary Care; Women’s Center at Clinton Family; and Women’s Center at Rochester
`Wolcott Primary Care; Women's Center at Clinton Family; and Women's Center at Rochester
`
`General Hospital. Each of these clinics is a covered entity participating in the 340B Drug
`General Hospital. Each of these clinics is a covered entity participating in the 340B Drug
`
`Discount Program with contracts with retail pharmacies. For years, these clinics have obtained
`Discount Program with contracts with retail pharmacies. For years, these clinics have obtained
`
`Contract Pharmacy 340B Drug Discounts from nearly all drug companies, including Defendants,
`Contract Pharmacy 340B Drug Discounts from nearly all drug companies, including Defendants,
`
`and have been able to use the resulting savings to expand healthcare options for patients in their
`and have been able to use the resulting savings to expand healthcare options for patients in their
`
`communities.
`communities.
`
`6.
`6.
`
`Defendants’ conspiracy began in the summer of 2020. Through mid-summer,
`Defendants' conspiracy began in the summer of 2020. Through mid-summer,
`
`Defendants had spent millions collectively lobbying the federal government (in efforts not
`Defendants had spent millions collectively lobbying the federal government (in efforts not
`
`challenged here) to limit 340B Drug Discounts with respect to diabetes medicines. A long-
`challenged here) to limit 340B Drug Discounts with respect to diabetes medicines. A long-
`
`running lobbying campaign by drug companies had sought (i) to limit the level of hospital
`running lobbying campaign by drug companies had sought (i) to limit the level of hospital
`
`participation in the 340B Program, (ii) to limit which patients could qualify for 340B Drug
`participation in the 340B Program, (ii) to limit which patients could qualify for 340B Drug
`
`Discounts, (iii) to require that all discounts be passed through to patients at the point of sale,
`Discounts, (iii) to require that all discounts be passed through to patients at the point of sale,
`
`and/or (iv) to restrict the availability of Contract Pharmacy 340B Drug Discounts. But
`and/or (iv) to restrict the availability of Contract Pharmacy 340B Drug Discounts. But
`
`Defendants’ lobbying efforts failed. That failure became evident on July 24, 2020, when
`Defendants' lobbying efforts failed. That failure became evident on July 24, 2020, when
`
`President Trump issued Executive Order 13937 addressing the 340B Drug Discount in the
`President Trump issued Executive Order 13937 addressing the 340B Drug Discount in the
`
`context of insulin medication and injectable epinephrine. The executive order did little to
`context of insulin medication and injectable epinephrine. The executive order did little to
`
`accomplish any of Defendants’ goals. As soon as it became clear that Defendants’ collective
`accomplish any of Defendants' goals. As soon as it became clear that Defendants' collective
`
`lobbying efforts had failed, Defendants turned to another plan focused on just the last of those
`lobbying efforts had failed, Defendants turned to another plan focused on just the last of those
`
`goals—collusively eliminating or limiting Contract Pharmacy 340B Drug Discounts for their
`goals—collusively eliminating or limiting Contract Pharmacy 340B Drug Discounts for their
`
`drugs, most significantly including their drugs dominating rapid-acting analog insulin, long-
`drugs, most significantly including their drugs dominating rapid-acting analog insulin, long-
`
`4 4
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`Case 6:21-cv-06507 Document 1 Filed 07/30/21 Page 5 of 77
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`acting analog insulin, and incretin mimetic sales. Indeed, on July 24, 2020, the very same day
`acting analog insulin, and incretin mimetic sales. Indeed, on July 24, 2020, the very same day
`
`that the executive order was issued, the first defendant, AstraZeneca, revealed its intention to
`that the executive order was issued, the first defendant, AstraZeneca, revealed its intention to
`
`restrict Contract Pharmacy 340B Drug Discounts.
`restrict Contract Pharmacy 340B Drug Discounts.
`
`7.
`7.
`
`The other Defendants executed similar plans in short order. While Defendants’
`The other Defendants executed similar plans in short order. While Defendants'
`
`Plan A (lobbying the federal government to restrict 340B Drug Discounts) may have been
`Plan A (lobbying the federal government to restrict 340B Drug Discounts) may have been
`
`perfectly legal and legitimate, their Plan B (agreeing among themselves to restrict Contract
`perfectly legal and legitimate, their Plan B (agreeing among themselves to restrict Contract
`
`Pharmacy 340B Drug Discounts) was not. The plan worked only with buy-in from each of the
`Pharmacy 340B Drug Discounts) was not. The plan worked only with buy-in from each of the
`
`other Defendants. If any Defendant had acted alone, it would have risked losing significant
`other Defendants. If any Defendant had acted alone, it would have risked losing significant
`
`market share in the lucrative markets for diabetes treatments; and, over time, safety-net providers
`market share in the lucrative markets for diabetes treatments; and, over time, safety-net providers
`
`could have purchased drugs from that Defendant’s competitors to access Contract Pharmacy
`could have purchased drugs from that Defendant's competitors to access Contract Pharmacy
`
`340B Drug Discounts to maximize healthcare services and to lower costs for patients. But, by
`340B Drug Discounts to maximize healthcare services and to lower costs for patients. But, by
`
`acting together, Defendants safeguarded themselves against competition in the lucrative diabetes
`acting together, Defendants safeguarded themselves against competition in the lucrative diabetes
`
`medication markets. Defendants’ conspiracy has succeeded in raising prices, by eliminating
`medication markets. Defendants' conspiracy has succeeded in raising prices, by eliminating
`
`Contract Pharmacy 340B Drug Discounts, while protecting their market position from
`Contract Pharmacy 340B Drug Discounts, while protecting their market position from
`
`competition from one another.
`competition from one another.
`
`8.
`8.
`
`That conspiracy is doing immense damage to plaintiff and other safety-net
`That conspiracy is doing immense damage to plaintiff and other safety-net
`
`hospitals and clinics, and, consequently, to the healthcare options available to the patients they
`hospitals and clinics, and, consequently, to the healthcare options available to the patients they
`
`serve. Congress gave safety-net hospitals and clinics “access to [340B Drug Discounts] . . . to
`serve. Congress gave safety-net hospitals and clinics "access to [340B Drug Discounts] . . . to
`
`enable these entities to stretch scarce Federal resources as far as possible, reaching more eligible
`enable these entities to stretch scarce Federal resources as far as possible, reaching more eligible
`
`patients and providing more comprehensive services.” H.R. Rep. No. 102-384(II), at 12 (1992).
`patients and providing more comprehensive services." H.R. Rep. No. 102-384(II), at 12 (1992).
`
`Defendants’ conspiracy is having the opposite effect—limiting the ability of safety-net hospitals
`Defendants' conspiracy is having the opposite effect—limiting the ability of safety-net hospitals
`
`and clinics to reach more patients and provide more healthcare services by causing significant
`and clinics to reach more patients and provide more healthcare services by causing significant
`
`financial shortfalls for plaintiff and other safety-net hospitals and clinics alike. The savings that
`financial shortfalls for plaintiff and other safety-net hospitals and clinics alike. The savings that
`
`5 5
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`Case 6:21-cv-06507 Document 1 Filed 07/30/21 Page 6 of 77
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`hospitals and clinics generate from Contract Pharmacy 340B Drug Discounts are used, among
`hospitals and clinics generate from Contract Pharmacy 340B Drug Discounts are used, among
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`other things, to expand the medical services available to the communities served by safety-net
`other things, to expand the medical services available to the communities served by safety-net
`
`facilities, especially for the uninsured or underinsured, and to provide charity care or subsidized
`facilities, especially for the uninsured or underinsured, and to provide charity care or subsidized
`
`pharmacy benefits to help meet the healthcare needs of needy patients. Defendants’ conspiracy
`pharmacy benefits to help meet the healthcare needs of needy patients. Defendants' conspiracy
`
`has threatened those services and benefits. Because Defendants’ conspiracy violates state and
`has threatened those services and benefits. Because Defendants' conspiracy violates state and
`
`federal antitrust laws, and the common law, plaintiff seeks classwide damages, injunctive, and
`federal antitrust laws, and the common law, plaintiff seeks classwide damages, injunctive, and
`
`other equitable relief.
`other equitable relief.
`
`PARTIES
`PARTIES
`
`9.
`9.
`
`Plaintiff Mosaic Health, Inc., formerly known as Rochester Primary Care
`Plaintiff Mosaic Health, Inc., formerly known as Rochester Primary Care
`
`Network, is a nonprofit healthcare organization with its principal place of business in Rochester,
`Network, is a nonprofit healthcare organization with its principal place of business in Rochester,
`
`New York. Mosaic Health, Inc. is a federally qualified health center that receives funds from the
`New York. Mosaic Health, Inc. is a federally qualified health center that receives funds from the
`
`U.S. Department of Health and Human Services, Health Resources and Services Administration
`U.S. Department of Health and Human Services, Health Resources and Services Administration
`
`to provide healthcare services to people residing in medically underserved areas, regardless of
`to provide healthcare services to people residing in medically underserved areas, regardless of
`
`their ability to pay. Mosaic Health, Inc. includes 22 safety-net clinics participating in the 340B
`their ability to pay. Mosaic Health, Inc. includes 22 safety-net clinics participating in the 340B
`
`Program: Charlotte School Based Health Center; Clinton Family Health; Edison Tech
`Program: Charlotte School Based Health Center; Clinton Family Health; Edison Tech
`
`Community Health Center; Freddie Thomas Health Center; Genesee Health service; John James
`Community Health Center; Freddie Thomas Health Center; Genesee Health service; John James
`
`Audubon Health Center; Martin Luther King Jr. Health Center; Mosaic Health Rushville; Mosaic
`Audubon Health Center; Martin Luther King Jr. Health Center; Mosaic Health Rushville; Mosaic
`
`Health Mount Morris; Mosaic Health Lyons; Mosaic Health Utica; Mosaic Health Utica Dental;
`Health Mount Morris; Mosaic Health Lyons; Mosaic Health Utica; Mosaic Health Utica Dental;
`
`Mosaic Health Ilion; Newark Internal Medicine; Riedman Health Center; Unity Dental at St.
`Mosaic Health Ilion; Newark Internal Medicine; Riedman Health Center; Unity Dental at St.
`
`Mary’s; Unity Dental at Ridgeway; Unity Family Medicine at Orchard Street; Unity Family
`Mary's; Unity Dental at Ridgeway; Unity Family Medicine at Orchard Street; Unity Family
`
`Medicine at St. Mary’s; Wolcott Primary Care; Women’s Center at Clinton Family; and
`Medicine at St. Mary's; Wolcott Primary Care; Women's Center at Clinton Family; and
`
`Women’s Center at Rochester General Hospital. Mosaic Health has had contract pharmacy
`Women's Center at Rochester General Hospital. Mosaic Health has had contract pharmacy
`
`arrangements in place since at least October 2010.
`arrangements in place since at least October 2010.
`
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`10.
`10.
`
`Defendant Sanofi-Aventis U.S., LLC is a Delaware limited liability company with
`Defendant Sanofi-Aventis U.S., LLC is a Delaware limited liability company with
`
`its principal place of business in Bridgewater, New Jersey. Sanofi-Aventis U.S., LLC is a
`its principal place of business in Bridgewater, New Jersey. Sanofi-Aventis U.S., LLC is a
`
`wholly owned subsidiary of the French company, Sanofi.
`wholly owned subsidiary of the French company, Sanofi.
`
`11.
`11.
`
`Defendant Eli Lilly and Company is an Indiana corporation with its principal
`Defendant Eli Lilly and Company is an Indiana corporation with its principal
`
`place of business in Indianapolis, Indiana.
`place of business in Indianapolis, Indiana.
`
`12.
`12.
`
`Defendant Lilly USA, LLC is an Indiana limited liability company with its
`Defendant Lilly USA, LLC is an Indiana limited liability company with its
`
`principal place of business in Indianapolis, Indiana. Lilly USA, LLC is a wholly owned
`principal place of business in Indianapolis, Indiana. Lilly USA, LLC is a wholly owned
`
`subsidiary of Eli Lilly and Company.
`subsidiary of Eli Lilly and Company.
`
`13.
`13.
`
`Defendant Novo Nordisk Inc. is a Delaware corporation with its principal place of
`Defendant Novo Nordisk Inc. is a Delaware corporation with its principal place of
`
`business in Plainsboro, New Jersey. Novo Nordisk Inc. is the United States affiliate of the
`business in Plainsboro, New Jersey. Novo Nordisk Inc. is the United States affiliate of the
`
`Danish company, Novo Nordisk A/S.
`Danish company, Novo Nordisk A/S.
`
`14.
`14.
`
`Defendant AstraZeneca Pharmaceuticals LP is a Delaware limited partnership
`Defendant AstraZeneca Pharmaceuticals LP is a Delaware limited partnership
`
`with its principal place of business in Wilmington, Delaware. AstraZeneca Pharmaceuticals LP
`with its principal place of business in Wilmington, Delaware. AstraZeneca Pharmaceuticals LP
`
`is a wholly owned subsidiary of the English company, AstraZeneca Pharmaceuticals PLC.
`is a wholly owned subsidiary of the English company, AstraZeneca Pharmaceuticals PLC.
`
`JURISDICTION AND VENUE
`JURISDICTION AND VENUE
`
`15.
`15.
`
`This Court has subject matter jurisdiction over the claims arising under federal
`This Court has subject matter jurisdiction over the claims arising under federal
`
`antitrust laws under 15 U.S.C. §§ 4, 15, and 26, and 28 U.S.C. §§ 1331 and 1337. This Court has
`antitrust laws under 15 U.S.C. §§ 4, 15, and 26, and 28 U.S.C. §§ 1331 and 1337. This Court has
`
`supplemental jurisdiction over the claims arising under State laws under 28 U.S.C. § 1367. This
`supplemental jurisdiction over the claims arising under State laws under 28 U.S.C. § 1367. This
`
`Court also has diversity jurisdiction over this class action of the State law claims under 28 U.S.C.
`Court also has diversity jurisdiction over this class action of the State law claims under 28 U.S.C.
`
`§ 1332(d) because the aggregate amount in controversy exceeds $5,000,000, there are more than
`§ 1332(d) because the aggregate amount in controversy exceeds $5,000,000, there are more than
`
`one hundred class members, and members of the class are citizens of states different from that of
`one hundred class members, and members of the class are citizens of states different from that of
`
`one of the Defendants. Likewise, this Court has diversity jurisdiction over the named Plaintiff’s
`one of the Defendants. Likewise, this Court has diversity jurisdiction over the named Plaintiffs
`
`7 7
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`claims under 28 U.S.C. § 1332(a) because all of the named Plaintiff is a citizen of different
`claims under 28 U.S.C. § 1332(a) because all of the named Plaintiff is a citizen of different
`
`States than all of the Defendants and the amount in controversy exceeds $75,000.
`States than all of the Defendants and the amount in controversy exceeds $75,000.
`
`16.
`16.
`
`This Court has personal jurisdiction over Defendants under Rule 4(k)(1)(A) of the
`This Court has personal jurisdiction over Defendants under Rule 4(k)(1)(A) of the
`
`Federal Rules of Civil Procedure and NY CPLR § 302 because, inter alia, Defendants transact
`Federal Rules of Civil Procedure and NY CPLR § 302 because, inter alia, Defendants transact
`
`and do business within the State of New York, contract to supply goods and services within the
`and do business within the State of New York, contract to supply goods and services within the
`
`State of New York, regularly solicit business and derive substantial revenue from drugs sold in
`State of New York, regularly solicit business and derive substantial revenue from drugs sold in
`
`the State of New York, and/or should reasonably expect the acts described in this complaint to
`the State of New York, and/or should reasonably expect the acts described in this complaint to
`
`have consequences in the State of New York.
`have consequences in the State of New York.
`
`17.
`17.
`
`Venue is appropriate in this District under 15 U.S.C. § 22 because Defendants
`Venue is appropriate in this District under 15 U.S.C. § 22 because Defendants
`
`each transact business in this district and may be found in this district. Venue is also appropriate
`each transact business in this district and may be found in this district. Venue is also appropriate
`
`in this District under 28 U.S.C. § 1391 because a substantial part of the events or omissions
`in this District under 28 U.S.C. § 1391 because a substantial part of the events or omissions
`
`giving rise to the claim occurred in this district; and, in the alternative, venue is appropriate in
`giving rise to the claim occurred in this district; and, in the alternative, venue is appropriate in
`
`this District under 28 U.S.C. § 1391 because Defendants are not all residents of the same State
`this District under 28 U.S.C. § 1391 because Defendants are not all residents of the same State
`
`and are subject to this Court’s personal jurisdiction.
`and are subject to this Court's personal jurisdiction.
`
`ALLEGATIONS
`ALLEGATIONS
`
`I.
`I.
`
`Drug companies have long offered Contract Pharmacy 340B Drug Discounts to
`Drug companies have long offered Contract Pharmacy 340B Drug Discounts to
`eligible hospitals and clinics.
`eligible hospitals and clinics.
`
`A.
`A.
`
`The 340B Drug Discount is a longstanding discount offered by drug
`The 340B Drug Discount is a longstanding discount offered by drug
`companies to hospitals and clinics serving underserved populations.
`companies to hospitals and clinics serving underserved populations.
`
`18.
`18.
`
`Prior to Defendants’ conspiracy, all drug companies participating in Medicaid and
`Prior to Defendants' conspiracy, all drug companies participating in Medicaid and
`
`Medicare Part B had offered Contract Pharmacy 340B Drug Discounts as part of their
`Medicare Part B had offered Contract Pharmacy 340B Drug Discounts as part of their
`
`participation in the 340B Drug Discount Program.
`participation in the 340B Drug Discount Program.
`
`19.
`19.
`
`The 340B Drug Discount Program dictates the calculation of the 340B Drug
`The 340B Drug Discount Program dictates the calculation of the 340B Drug
`
`Discount. The 340B Drug Discount is provided by the manufacturer to the covered entities
`Discount. The 340B Drug Discount is provided by the manufacturer to the covered entities
`
`8 8
`
`

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`Case 6:21-cv-06507 Document 1 Filed 07/30/21 Page 9 of 77
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`participating in the 340B Program. That program provides the infrastructure for drug companies
`participating in the 340B Program. That program provides the infrastructure for drug companies
`
`to offer the 340B Discount through contract pharmacies. And, until the second half of 2020, all
`to offer the 340B Discount through contract pharmacies. And, until the second half of 2020, all
`
`drug companies participating in Medicaid and Medicare Part B had offered the Contract
`drug companies participating in Medicaid and Medicare Part B had offered the Contract
`
`Pharmacy 340B Drug Discount.
`Pharmacy 340B Drug Discount.
`
`1.
`1.
`
`The 340B Drug Discount Program supports healthcare programs for
`The 340B Drug Discount Program supports healthcare programs for
`the underserved.
`the underserved.
`
`20.
`20.
`
`The 340B Drug Discount Program was created in 1992 by Section 340B of the
`The 340B Drug Discount Program was created in 1992 by Section 340B of the
`
`Public Health Service Act, 42 U.S.C. § 256b (Section 340B), to require discounts on outpatient
`Public Health Service Act, 42 U.S.C. § 256b (Section 340B), to require discounts on outpatient
`
`drugs purchased by healthcare providers serving underserved populations. “Under § 340B,”
`drugs purchased by healthcare providers serving underserved populations. "Under § 340B,"
`
`“manufacturers participating in Medicaid must offer discounted drugs to covered entities,
`"manufacturers participating in Medicaid must offer discounted drugs to covered entiti