By Mike Scarcella

Aug 6 (Reuters) - Drugmakers Sanofi, Eli Lilly, Novo Nordisk and AstraZeneca must face a lawsuit from two health centers accusing them of conspiring to restrict drug discounts offered to community pharmacies that contract with providers serving low-income patients.

A three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York ruled that federally funded Mosaic Health and Central Virginia Health Services can move ahead for now with their proposed class action.

The appeals court in its unanimous order reversed a decision by a federal judge dismissing the lawsuit.

The clinics contend the drugmakers schemed in 2020 to limit discounts on diabetes drugs that were available to safety-net providers purchasing drugs from some pharmacies through a federal program known as "340B."

As direct competitors, the four defendants control the diabetes drug marketplace, which would make imposing restrictions "easy to coordinate and maintain,” Circuit Judge Myrna Pérez wrote in the ruling, joined by Circuit Judges Alison Nathan and Maria Araújo Kahn.

A Sanofi spokesperson in a statement said the company was reviewing the opinion and considering its next steps. Eli Lilly, Novo Nordisk and AstraZeneca did not immediately respond to requests for comment. The companies have denied any wrongdoing.

Brian Feldman, a lead attorney for the health clinics, in a statement called the 2nd Circuit’s order a “watershed moment” and said “we look forward to seeking justice for safety-net providers.”

Mosaic Health operates 22 clinics in New York, and Central Virginia Health Services runs 18 clinics in Virginia. The two clinics sued in 2021 seeking damages for alleged revenue lost from the discount program’s savings.

The plaintiffs told the appeals court that Sanofi and the other manufacturers made billions of dollars in additional profits “at the expense of safety-net providers and, ultimately, the patients they serve.”

In a court filing, the drugmakers called the plaintiffs’ claims “far-fetched” and said the clinics were trying to punish the companies for implementing policies designed to address what they said were “well-documented” abuses of the 340B program.

Drugmakers must participate in the program to receive funds from government health insurance programs like Medicare and Medicaid.

The case is Mosaic Health Inc v. Sanofi-Aventis U.S. LLC et al, 2nd U.S. Circuit Court of Appeals, No. 24-598.

For plaintiffs: Brian Feldman of Aurelian Law

For defendants: Allon Kedem of Arnold & Porter Kaye Scholer

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(Reporting by Mike Scarcella)