Clearing the 340B Antitrust Path: Second Circuit Confirms Astra/Illinois Brick Do Not Bar Section 1 Claims and Endorses a Flexible Parallel-Conduct Pleading Standard

Introduction

In Mosaic Health, Inc. v. Sanofi-Aventis U.S., LLC (No. 24-598, 2d Cir. Oct. 15, 2025), a panel of the Second Circuit (Judges Pérez, Nathan, and Kahn; opinion by Judge Pérez) vacated the dismissal of a putative class action brought by safety-net health centers against major diabetes drug manufacturers—Sanofi, Eli Lilly, Novo Nordisk, and AstraZeneca. The plaintiffs alleged a horizontal price-fixing conspiracy under Section 1 of the Sherman Act arising from coordinated restrictions on the availability of 340B discounts at contract pharmacies. The district court dismissed the first amended complaint and denied leave to file a second amended complaint on futility grounds. The Second Circuit held the proposed second amended complaint plausibly alleged a Section 1 conspiracy through parallel conduct and plus factors, and that two threshold defenses—Astra USA, Inc. v. Santa Clara County and Illinois Brick Co. v. Illinois—do not bar the suit or the requested remedies.

The decision is significant for at least three reasons:

It confirms that Astra’s bar on private enforcement of 340B pricing obligations does not preclude independent antitrust claims challenging concerted conduct by manufacturers.
It holds that Illinois Brick does not bar federal antitrust damages where plaintiffs disclaim “overcharge” damages and seek “lost access” damages and injunctive relief; Section 16 injunctive relief remains broadly available.
It elaborates a pragmatic, flexible view of “parallel conduct” and “plus factors” at the pleadings stage, recognizing shared lobbying, trade association interactions, and “safety in numbers” against regulatory risk as plausible indicators of concerted action.

Summary of the Opinion

The Second Circuit reviewed de novo the Rule 12(b)(6) dismissal and the denial of leave to amend on futility grounds. Accepting the non-conclusory allegations as true and drawing reasonable inferences in plaintiffs’ favor, the court held:

No Astra bar: Because plaintiffs do not seek to enforce 340B statutory ceiling prices or Pharmaceutical Pricing Agreements (PPAs), but instead allege an independent antitrust conspiracy, Astra does not preclude their claims.
No Illinois Brick bar: Plaintiffs’ federal claims seek injunctive relief and “lost access” damages, not overcharge damages. That form of injury does not raise duplicative recovery concerns underpinning Illinois Brick. Section 16 injunctive claims are particularly unencumbered by indirect purchaser limitations.
Plausible Section 1 conspiracy: The proposed second amended complaint alleges sufficiently parallel conduct—similar in substance, timing, and effect—when all four manufacturers curtailed 340B discounts at contract pharmacies within a compressed timeframe and with comparable exceptions, leading to dramatic, contemporaneous drops in 340B volumes. Plaintiffs also alleged multiple plus factors: common motive, conduct contrary to each defendant’s unilateral self-interest (“safety in numbers”), and high levels of interfirm communications through shared lobbying firms and trade association work (PhRMA).
Vacatur and remand: The court vacated the dismissal and the denial of leave to amend, and remanded with instructions to permit filing of the second amended complaint and to reexamine state-law claims in light of the revived federal antitrust theory.

Analysis

Precedents Cited and Their Influence

Bell Atl. Corp. v. Twombly (2007) and Ashcroft v. Iqbal (2009): Set the plausibility standard. Twombly requires more than mere parallel conduct—“plus factors” or contextual allegations suggesting agreement. Mosaic applies Twombly flexibly, emphasizing that plaintiffs need not show the most plausible explanation, only a plausible one.
Mayor & City Council of Baltimore v. Citigroup (2d Cir. 2013): Endorses reliance on circumstantial evidence and plus factors to infer conspiracies. Mosaic draws on this to highlight common motive, self-interest, and interfirm communications.
Anderson News I (2d Cir. 2012) and Anderson News II (2d Cir. 2018): Warn against dismissing a complaint by choosing among plausible alternatives at the pleading stage; instruct courts to assess conduct and communications “in context” and consider the “overall picture.” Mosaic relies heavily on this posture to reject the district court’s “obvious alternative explanation” analysis.
United States v. Apple (2d Cir. 2015): Demonstrates that vertically structured agreements can evidence a horizontal conspiracy when orchestrated to fix prices; underscores the relevance of communications among competitors. Mosaic uses Apple to show that otherwise-lawful unilateral actions can support a Section 1 claim when context indicates coordination.
Gelboim v. Bank of America (2d Cir. 2016): Confirms broad antitrust standing at the pleading stage and recognizes conspiracies to manipulate benchmark processes (e.g., LIBOR). Mosaic analogizes to Gelboim to support conspiracy in a regulated pricing environment.
Astra USA, Inc. v. Santa Clara County (2011): No private right to enforce 340B ceiling prices or PPAs. Mosaic reads Astra narrowly: it channels 340B compliance disputes to HRSA but does not immunize defendants from independent antitrust challenges.
Illinois Brick Co. v. Illinois (1977): Bars indirect purchasers’ overcharge damages claims to avoid duplicative recovery. Mosaic limits Illinois Brick to overcharge damages and emphasizes that “lost access” damages and injunctive relief do not pose the same risks.
Blue Shield v. McCready (1982): Allows recovery where duplicative exaction is not at issue. Mosaic relies on McCready to situate “lost access” as outside Illinois Brick’s duplicative-recovery rationale.
In re Brand Name Prescription Drugs (7th Cir. 1997) (dicta): Suggests Illinois Brick concerns “fall away” where no overcharge damages are sought. Mosaic echoes this logic.
American Tobacco Co. v. United States (1946): Recognizes conspiracies executed via different methods toward a common price-fixing end. Mosaic cites this to underscore that parallel conduct need not be uniform in means.
SD3, LLC v. Black & Decker (4th Cir. 2015), Evergreen Partnering (1st Cir. 2013), Baby Food (3d Cir. 1999): Sister-circuit support for a broad, practical view of parallel conduct and plus factors; prices need not be identical, and lockstep uniformity is not required. Mosaic adopts this approach.
In re Publication Paper Antitrust Litigation (2d Cir. 2012) and Areeda & Hovenkamp: Plaintiffs need not negate all independent explanations at the pleading stage. Mosaic applies this directly to rebuff the district court’s reasoning.

Legal Reasoning

1) Astra does not bar these Sherman Act claims.

The plaintiffs do not seek to enforce the 340B statute or the PPAs. Their claim is not that defendants violated 340B ceiling-price obligations but that they conspired to restrict discounts through coordinated limitations at contract pharmacies.
HRSA’s role under Astra is to police 340B compliance (ceiling prices, audits, refunds, civil penalties), not to adjudicate antitrust price-fixing. Channeling disputes to HRSA does not displace federal antitrust enforcement by private plaintiffs.

2) Illinois Brick does not preclude the requested relief.

Plaintiffs disclaim federal “overcharge” damages and seek “lost access” damages and injunctive relief.
Because “lost access” damages do not entail pass-on tracing or duplicative exaction, Illinois Brick’s core concern is not implicated. Injunctive relief under Section 16 of the Clayton Act is not constrained by indirect purchaser limitations.

3) The complaint plausibly alleges parallel conduct.

Substance: Each defendant curtailed 340B discounts at contract pharmacies via policy changes that, despite differing exceptions, had the same anticompetitive thrust—eliminating or sharply limiting discounted access at contract pharmacies for key diabetes drugs (rapid-acting insulins, long-acting insulins, incretin mimetics).
Timing: Announcements clustered within roughly four months (three of four within one month), producing simultaneous market effects—mirroring the timeframe sufficiency recognized in Second Circuit cases like Starr.
Effect: All four experienced immediate, significant declines (60–90%) in 340B discounted volumes at contract pharmacies, with Novo Nordisk’s drop at 70% in the month of its new policy and similar drops for others—evidence of parallel market impact.
Non-uniform exceptions do not defeat parallelism: Exceptions (e.g., one contract pharmacy, data-sharing conditions, limited “at cost” carve-out) are consistent with a conspiracy pursued by varied methods, akin to American Tobacco and Twombly’s broad view of parallel conduct.

4) The complaint plausibly alleges multiple plus factors.

Common motive: Coordinated restrictions increase profits by eliminating competition over discounted pricing and mitigating market-share erosion tied to 340B. They also reduce regulatory exposure relative to unilateral deviations.
Contrary to unilateral self-interest (“safety in numbers”): Acting alone to restrict discounts would risk losing market share to rivals continuing 340B sales and invite severe sanctions (including potential exclusion from Medicare/Medicaid). Collective action dilutes those risks and stabilizes the competitive landscape.
Interfirm communications: Shared lobbying firms (Tarplin, Downs & Young; Williams & Jensen; W Strategies) and contemporaneous coordination within PhRMA (where all defendants were members and board participants) plausibly show opportunities to exchange information and align strategies concerning 340B contract pharmacy policy.

5) Competing “obvious alternative explanation” rejected at the pleadings stage.

The district court’s inference—that defendants merely reacted independently to failed lobbying—could be plausible, but plaintiffs’ conspiracy inference is also plausible. Under Anderson News and Twombly/Iqbal, courts cannot dismiss by choosing among plausible explanations at Rule 12(b)(6).
Plaintiffs need not negate all non-conspiratorial explanations; it is enough to present a plausible conspiracy consistent with the alleged facts.

6) State-law claims must be reexamined.

Because the federal Section 1 claim is plausibly pled, the district court’s futility rationale for dismissing state antitrust and unjust enrichment claims falls away. On remand, those claims must be reconsidered in light of the revived conspiracy theory.

Impact

On federal antitrust pleading in the Second Circuit:

Reaffirms a pragmatic, context-sensitive approach to parallel conduct and plus factors. Plaintiffs can plead parallelism through general similarities in substance, timing, and effect—without lockstep identity—and use shared lobbying/trade association interactions to infer interfirm communications.
Strengthens the principle that courts cannot dismiss by deeming a defendant’s alternative narrative “more plausible” where plaintiffs’ conspiracy narrative is also plausible.

On the pharmaceutical and 340B landscapes:

Clarifies that Astra does not insulate drug manufacturers from Sherman Act scrutiny when they collectively restrict 340B discounts at contract pharmacies. HRSA’s 340B enforcement and private antitrust enforcement occupy distinct lanes.
Encourages careful compliance and antitrust protocols around multi-firm lobbying and trade association activities. Shared advocacy on sensitive pricing-discount topics can support “plus factor” allegations when coupled with coordinated market outcomes.
Recognizes “lost access” as a cognizable injury for federal antitrust damages (separate from overcharges) and confirms the availability of Section 16 injunctive relief—both consequential for safety-net providers seeking to maintain discount channels.

On litigation strategy and practice:

Plaintiffs: Mosaic is a blueprint for drafting robust Section 1 complaints—include (1) a detailed timeline of functionally similar policy changes; (2) empirical market-impact allegations; (3) concrete plus factors (motive, self-interest analysis, interfirm communications via shared agents/associations); and (4) precise remedies framing (disclaim overcharge damages for federal claims where Illinois Brick could bite; seek lost-access damages and injunctive relief).
Defendants: Mere invocation of a legitimate alternative explanation (e.g., post-lobbying unilateral decisions) is unlikely to defeat a well-pled complaint at Rule 12(b)(6). Robust challenges may need to await summary judgment after discovery focused on communications, decision chronology, and economic incentives.

Complex Concepts Simplified

Section 340B Drug Discount Program: A federal program requiring manufacturers of Medicaid/Medicare-covered drugs to offer ceiling-price discounts to “covered entities” (safety-net providers). Many providers use “contract pharmacies” to dispense 340B drugs because they lack in-house pharmacies.
Contract Pharmacies: Third-party retail/community pharmacies that dispense 340B-discounted drugs on behalf of covered entities under “bill to, ship to” arrangements historically permitted by HHS.
Section 1 Horizontal Price-Fixing: Agreements among competitors at the same market level to fix prices or restrict price-related terms. Generally per se unlawful—courts need not conduct a full-blown rule-of-reason analysis once an agreement is established.
Parallel Conduct: Competitors acting in similar ways. At the pleadings stage, “parallel” means broadly similar in substance, timing, or effect—not necessarily identical or simultaneous steps.
Plus Factors: Contextual facts suggesting agreement rather than coincidence, including (1) common motive to conspire; (2) conduct contrary to unilateral self-interest; and (3) interfirm communications or opportunities to coordinate (e.g., shared consultants, trade association activities).
“Safety in Numbers” (Self-Interest Analysis): A restriction that would be irrational for a single firm (due to market-share loss or regulatory risk) becomes rational if all major rivals adopt it together—supporting an inference of agreement.
Indirect Purchaser Doctrine (Illinois Brick): Generally bars indirect purchasers from seeking federal overcharge damages to avoid duplicative liability and complex pass-on proof. It does not typically bar equitable relief or non-overcharge damages that do not implicate pass-on tracing.
Antitrust Injury and Efficient Enforcer: A plaintiff must suffer injury of the type the antitrust laws were intended to prevent and be a suitable party to enforce the antitrust laws (at the pleading stage, a low threshold in the Second Circuit).
Section 16 Injunctive Relief: Allows private plaintiffs to seek injunctions against threatened loss or damage from antitrust violations; not constrained by the indirect purchaser bar in the same way as damages under Section 4.

Conclusion

Mosaic Health meaningfully develops Second Circuit law on antitrust pleading and remedies in the healthcare-discount context. The court:

Holds that Astra’s channeling of 340B enforcement to HRSA does not preempt independent Sherman Act claims challenging concerted conduct by manufacturers.
Clarifies that Illinois Brick does not foreclose “lost access” damages or injunctive relief under Section 16, where duplicative recovery concerns are absent.
Endorses a practical, flexible approach to pleading parallel conduct—general similarities in substance, timing, and effect suffice—paired with well-articulated plus factors such as shared lobbying efforts, trade association communications, common motive, and “safety in numbers.”

The decision vacates the dismissal and directs the district court to permit the second amended complaint and to reconsider state-law claims. More broadly, Mosaic signals that coordinated restrictions on access to discount programs—especially in concentrated markets—are fertile ground for Section 1 scrutiny when complaints plausibly allege parallel conduct and contextual facts pointing to agreement. It also offers a carefully bounded path around Illinois Brick for plaintiffs who frame injuries as lost access rather than overcharges and who seek forward-looking injunctive relief to restore competition.