AAI has filed an amicus brief in Mosaic Health, et al v. Sanofi Aventis, et al. urging the Second Circuit to reverse the dismissal of a potential class action against four major insulin manufacturers (Sanofi Aventis, Novo Nordisk, AstraZeneca, and Eli Lilly) for collusion to reduce discounts under the federal 340B drug discount program. The suit alleges that these pharmaceutical companies, disappointed in joint lobbying efforts to narrow the 340B discounts, agreed to use their collective dominance in insulin markets to dramatically restrict their sales through the program, which seeks to provide affordable drugs to low-income patient populations. Such action, the plaintiffs allege, would not have been in their individual interest because of the risk of loss of full-price sales and the risk of exclusion from Medicare and Medicaid.
The AAI brief argues that the district court in this case misapplied the pleading standards described by the Second Circuit and the Supreme Court. By adopting a rigid definition of parallel conduct and discounting some of Plaintiffs’ key factual allegations, the district court misread Twombly and improperly put itself in the role of finder of fact.
AAI highlights the district court’s failure to take into account the steps sophisticated cartel participants will take to hide their illegal conduct, citing historical examples. The AAI brief argues that, uncorrected, such an approach to Section 1 pleading could provide cartelists with a blueprint to avoid private enforcement. On a broader scale, this could mean a significant decline in private enforcement and the loss of its vital deterrent value. In an economy where a wide range of studies suggest cartels are already under-deterred, the harm to consumers would be significant.
The brief was written by AAI Vice President and Director of Legal Advocacy Kathleen Bradish, with assistance from AAI Intern Sheridan Phelan and former AAI Intern Joseph Leader Gordon.
Read the full brief here: AAI Amicus Brief in Mosaic Health v. Sanofi