TL;DR
- Sanofi, Eli Lilly, Novo Nordisk, and AstraZeneca — four companies that together control the entire U.S. diabetes drug market — allegedly conspired to kill a federally mandated drug discount program that kept insulin and other diabetes medications affordable for low-income patients.
- The discount program they targeted, the Section 340B Drug Discount Program, legally requires these manufacturers to sell drugs at reduced prices to safety-net clinics serving uninsured and underinsured patients — these companies had honored it for a decade before cutting it off.
- Between July and December 2020, all four corporations announced nearly identical restrictions within months of each other — after first spending years lobbying the government together to kill the program outright and failing.
- The drug volume sold at discounted prices dropped 60–90% almost immediately, gutting clinics in New York and Virginia that serve patients who cannot afford full-price medication.
- A federal appeals court ruled in August 2025 that safety-net clinics have enough evidence of a price-fixing conspiracy to take these four corporations to trial under the Sherman Antitrust Act.
The court record includes the specific lobbying firms all four corporations shared — and the industry board where executives communicated directly before the cutoffs began. That infrastructure is in “Legal Receipts.”
Four pharmaceutical corporations that legally had to offer discounted insulin to low-income clinics — and had done so for over a decade — all decided, within the same four-month window, to stop. A federal appeals court says that’s not a coincidence.
The Program That Kept Diabetes Medicine Affordable — And Who Killed It
The Section 340B Drug Discount Program is a federal law. It says that any drug manufacturer selling drugs covered by Medicare or Medicaid must offer those drugs at a discounted ceiling price to safety-net healthcare providers. These are the clinics and hospitals that treat people who are uninsured, underinsured, and poor. The word “must” is not ambiguous. Manufacturers sign a Pharmaceutical Pricing Agreement to participate in Medicare and Medicaid. That agreement requires the discount. Full stop.
For the clinics on the receiving end, this discount is survival infrastructure. Mosaic Health, Inc. runs twenty-two safety-net clinics across New York. Central Virginia Health Services, Inc. runs eighteen in Virginia. Their patients receive medications on sliding-fee scales — meaning the less you earn, the less you pay. The 340B discount makes that possible. Without it, the math collapses and patients go without insulin.
For at least a decade, Sanofi, Eli Lilly, Novo Nordisk, and AstraZeneca all honored this program. Then, starting in 2020, they stopped. Together. On a timeline so tight it drew the attention of a federal court.
They Tried the Legal Route First — And Lost
Before the cutoffs, all four corporations collectively lobbied the federal government to weaken the 340B program. They hired the same firm, Tarplin, Downs & Young LLC, for this purpose. Sanofi and AstraZeneca together hired a second firm, W Strategies, LLC. Sanofi, Eli Lilly, and Novo Nordisk together hired a third firm, Williams and Jensen, PLLC. All of these firms simultaneously worked on the same issue for PhRMA, the pharmaceutical industry’s trade association — an association where all four of these Defendants hold seats on the board of directors.
On July 24, 2020, President Trump signed an executive order on insulin and the 340B program. The court record describes it as “extremely limited in scope and impact.” The lobbying blitz had failed. The discounts legally still had to be offered. The corporations needed a different plan.
Within days, they had one. And they all announced it at almost the same time.
— U.S. Court of Appeals, Second Circuit, August 6, 2025
The Cutoff Timeline: Four Companies, Four Months, One Effect
Discount Volume Collapse: % Drop in 340B Drug Sales After Cutoffs
The Non-Financial Ledger: What the Spreadsheet Doesn’t Count
The court filings measure the harm to safety-net clinics in terms of “significant financial loss.” That phrase does serious violence to what actually happened. The patients who rely on Mosaic Health’s twenty-two New York clinics and Central Virginia Health Services’ eighteen Virginia clinics are, by definition, the people with the fewest options. They are the uninsured. The underinsured. The working poor who cannot afford a $300 monthly insulin bill on a $1,400 paycheck. The 340B discount program existed precisely because Congress acknowledged that the market had already failed these people.
When these four corporations cut the discount, they did not cut it for wealthy patients at private endocrinology practices. They cut it specifically and structurally for the clinics that use sliding-fee schedules — the mechanism that allows a patient earning $18,000 a year to pay a fraction of the sticker price for the medication that keeps them alive. The 340B program was the financial load-bearing wall of that system. Sanofi, Eli Lilly, Novo Nordisk, and AstraZeneca removed it while billing their shareholders for the higher margins that resulted.
A Decade of Trust, Burned in Four Months
For over ten years, these corporations honored the 340B program. The clinics built their entire operating models around the assumption that federally mandated discounts would be honored, because the law said they had to be. Staff were hired. Pharmacy partnerships were structured. Sliding-fee schedules were calibrated. The infrastructure of care for low-income diabetic patients was constructed on the legal foundation of the 340B mandate — a foundation that four boardrooms decided to crack simultaneously in the summer of 2020.
The court record uses the phrase “covered entities” to describe the affected clinics. That language sanitizes the reality: these are places where a diabetic patient who drives forty-five minutes from a rural county to see a doctor is also getting their insulin dispensed through a community pharmacy under an arrangement that only works because of the 340B discount. When Eli Lilly announced in August 2020 that it would only honor the discount if the filling pharmacy charged zero dispensing fee — a condition the court’s own record called “infeasible for covered entities and pharmacies” — that was not a good-faith policy exception. It was a structural trap designed to look like accommodation while delivering the same result as total refusal.
The Quiet Violence of “Exceptions” That Don’t Work
Each corporation dressed up its cutoff with a carve-out that gave it political cover. AstraZeneca said clinics could still use one contract pharmacy, but only if they had no on-site dispensing pharmacy. Sanofi said discounts would continue if clinics handed over proprietary prescription-claims data to a Sanofi vendor. Novo Nordisk eventually allowed two pharmacies instead of one. Eli Lilly’s “exception” required pharmacies to fill prescriptions for free — with no dispensing fee at all — which the court record acknowledges was operationally impossible. These were not genuine accommodations. They were designed to exhaust clinics administratively while achieving the financial outcome of eliminating the discount entirely.
The aggregate result was a collapse in discounted drug volume: between 60% and 90% across all four manufacturers within months of the cutoffs. For a safety-net clinic running on thin margins serving patients who cannot afford alternatives, a 60–90% reduction in the purchasing discount it relies on is an existential financial event. It cascades: fewer affordable prescriptions filled, reduced patient adherence to medication regimens, more emergency room visits, more unmanaged diabetes complications, more amputations, more kidney disease, more preventable deaths — none of which appear anywhere in a pharmaceutical company’s earnings report.
Legal Receipts: What The Court Actually Said
“Defendants, as PhRMA board members, communicated among themselves, and their most prominent advocacy issue was 340B Drug Discounts, including Contract Pharmacy 340B Drug Discounts.” — Plaintiffs’ Proposed Second Amended Complaint, quoted in Mosaic Health v. Sanofi-Aventis, 2nd Circuit, August 6, 2025
“By jointly adopting a policy that largely denied covered entities the ability to purchase Section 340B Drugs for delivery to contract pharmacies, Defendants effectively eliminated the vast majority of their Section 340B Drug Discount sales through those pharmacies — thereby increasing their profits and reducing competition over discounted pricing for key diabetes drugs.” — U.S. Court of Appeals, Second Circuit, August 6, 2025
“Eli Lilly added a special exception to permit Contract Pharmacies to pass along certain insulin products at cost, however Plaintiffs allege that the exception was infeasible for covered entities and pharmacies, as it required Contract Pharmacies to fill prescriptions without any fee.” — Court of Appeals, quoting the proposed Second Amended Complaint, Joint Appendix p. 815
“Plaintiffs allege that if a Defendant alone restricted discounts, its market share and sales volumes for rapid-acting analog insulins, long-acting analog insulins, and incretin mimetics would be threatened. As the second amended complaint suggests, covered entities service both Section 340B Drug Discount eligible patients and those who would not participate in the program, so Defendants would not be losing the market share for those latter patients unless they all acted together.” — U.S. Court of Appeals, Second Circuit, August 6, 2025
“The district court failed to credit the inference that the Defendants’ sharing of lobbying services and joint participation on the PhRMA board suggests that the Defendants had ample opportunity to conspire based on months of communications about Section 340B Drug Discount restrictions with the common aim of collusion.” — U.S. Court of Appeals, Second Circuit, August 6, 2025 (reversing the lower court)
“When asked at oral argument why Defendants could not have colluded together to cleverly stagger to avoid detection, Defendants responded ‘so they could have done that but not at the same time that they stupidly clustered AstraZeneca’s announcement only one business day away from Sanofi’s announcement. That’s what doesn’t make sense if they are being clever.’ The law does not require the collusion to be cleverly disguised to constitute parallel conduct.” — U.S. Court of Appeals, Second Circuit, August 6, 2025 (footnote 5)
Societal Impact Mapping: Who Pays When Pharma Colludes
Public Health: When Insulin Becomes a Luxury
Diabetes is the seventh leading cause of death in the United States. Insulin-dependent diabetics who cannot afford or access their medication do not just feel bad — they develop life-threatening complications. Diabetic ketoacidosis, nerve damage, kidney failure, cardiovascular disease, and limb amputations are all directly downstream of insulin access gaps. The populations served by safety-net clinics like Mosaic Health and Central Virginia Health Services are disproportionately Black, Latino, Indigenous, and rural — populations that already face dramatically higher rates of diabetes and dramatically lower rates of insurance coverage.
The 340B program was specifically designed to bridge the gap between pharmaceutical pricing and the reality of what low-income patients can afford. The court record makes clear that these four corporations together control the three major diabetes drug markets in the United States: rapid-acting analog insulins, long-acting analog insulins, and incretin mimetics. This is not a situation where a patient can simply switch to a competitor’s product and get the discount elsewhere. The four companies that conspired to remove the discount are the entire market. There is nowhere else to go.
When the discount volume collapsed by 60–90%, those prescriptions did not simply move to a different pharmacy at a slightly different price. Many went unfilled. Patients who are already rationing insulin — a crisis so well-documented it became a political flashpoint — got one more structural barrier inserted between them and the medication keeping them alive. The companies that inserted that barrier reported strong financial performance in the same period.
Economic Inequality: Safety-Net Clinics Are the Last Line
Safety-net clinics operate on margins that would give a hospital CFO a panic attack. They serve patients who, by definition, cannot fully pay for their care. The sliding-fee discount model only functions when the underlying drug costs are contained. Mosaic Health’s twenty-two clinics and Central Virginia Health Services’ eighteen clinics represent forty healthcare facilities whose economic model was built on the legally-guaranteed 340B discount. When four pharmaceutical giants simultaneously eliminated 60–90% of that discount volume, they effectively transferred the cost burden of uncompensated care back onto the clinics — and ultimately onto the patients least able to absorb it.
The court record identifies another layer of economic coercion embedded in the corporations’ “exceptions.” Sanofi offered to continue the discount only if clinics handed over prescription-claims data to a Sanofi vendor. This is a straightforward data extraction scheme: pay for your discount in proprietary patient data that Sanofi can then use for marketing, price modeling, and competitive intelligence. A safety-net clinic serving poor patients in rural Virginia does not have the legal infrastructure or negotiating leverage to push back on that condition. It either surrenders the data or loses the discount. That is extortion with a compliance policy stapled to the front.
The economic impact compounds over time. Clinics that cannot sustain their financial model close. When a safety-net clinic closes, the patients it served do not quietly find a concierge physician. They go to emergency rooms for conditions that could have been managed in primary care. Emergency room visits for unmanaged diabetes cost the healthcare system — meaning taxpayers — multiples of what a properly-managed outpatient prescription would have cost. These four corporations increased their profits, and everyone else absorbed the systemic cost of the consequences.
What Now? The Corporations, The Watchdogs, and Your Next Move
The Corporations Still Operating These Policies
- Sanofi-Aventis U.S., LLC — continues to restrict 340B discounts and demand prescription-claims data from safety-net providers
- Eli Lilly and Company / Lilly USA, LLC — continues to restrict 340B discounts to single-pharmacy arrangements
- Novo Nordisk Inc. — continues to restrict 340B discounts, expanded slightly to two pharmacies
- AstraZeneca Pharmaceuticals LP — continues to restrict 340B discounts based on whether a clinic has an on-site pharmacy
The Industry Body That Provided the Meeting Room
- PhRMA (Pharmaceutical Research and Manufacturers of America) — all four Defendants hold board seats; the court record identifies PhRMA meetings as a primary venue for interfirm communications on the 340B issue
Regulatory and Legal Bodies to Watch
- Department of Justice (DOJ) Antitrust Division — horizontal price-fixing is a federal criminal matter under the Sherman Act; this civil case has now survived appeal and may generate criminal referrals
- Federal Trade Commission (FTC) — has authority to investigate anticompetitive conduct in pharmaceutical markets
- Health Resources and Services Administration (HRSA) / HHS — the federal agency responsible for administering the 340B program and auditing manufacturer compliance
- State Attorneys General — multiple state antitrust claims are part of this same lawsuit and will be re-examined on remand
What You Can Actually Do
The case is back in federal court on remand. The safety-net clinics fighting this case — Mosaic Health and Central Virginia Health Services — are doing so on behalf of every similar clinic in the country. If you or someone you know receives care at a federally qualified health center or safety-net clinic, that clinic’s ability to afford your medication is directly on the line. Support organizations that fund legal advocacy for healthcare access. Contact your congressional representatives about strengthening 340B enforcement, including criminal penalties for manufacturers who violate it collectively. Look up your local federally qualified health center and consider donating directly — these clinics run on thin margins and fight large legal battles simultaneously. The corporations in this case employ some of the largest law firms in the country. The clinics are running on community support and determination.
The source document for this investigation is attached below.
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