DECISION AND ORDER INTRODUCTION Plaintiffs Mosaic Health, Inc. (“Mosaic Health”) and Central Virginia Health Services, Inc. (“CVHS”) (collectively “Plaintiffs”) allege that defendant pharmaceutical companies Sanofi-Aventis U.S. (“Sanofi”), Eli Lilly and Company and Lilly USA, LLC (“Eli Lilly”), Novo Nordisk Inc. (“Novo Nordisk”), and AstraZeneca Pharmaceuticals LP (“AstraZeneca”) (collectively “Defendants”) have violated state and federal antitrust laws by coordinating to rescind a long-standing discount for “safety-net” hospitals and clinics that treat patients who would otherwise be unable to obtain care. (Dkt. 1). Presently before the Court is a joint motion to dismiss filed by Defendants. (Dkt. 47; Dkt. 48)1. For the reasons that follow, the Court grants Defendants’ motion, but conditionally grants Plaintiffs’ request for leave to file a second amended complaint. BACKGROUND I. Factual Background The instant facts are taken from Plaintiffs’ amended complaint, which is the operative pleading. As is required at this stage of the proceedings, Plaintiffs’ factual allegations are taken as true. Mosaic Health is a nonprofit healthcare organization with its principal place of business in Rochester, New York. (Dkt. 41 at 9). It is “a federally qualified health center that receives funds from the 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 their ability to pay” and operates 22 safety-net clinics. (Id.). CVHS is a nonprofit healthcare organization with its principal place of business in New Canton, Virginia. (Id. at 10). It is “a federally qualified health center that receives funds from the 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 their ability to pay” and operates 18 safety-net clinics. (Id.). In 1992, Section 340B of the Public Health Service Act, 42 U.S.C. §256b, created the “340B Drug Discount Program,” which “require[s] discounts on outpatient drugs purchased by healthcare providers serving underserved populations.” (Id. at 21). “The net savings and revenue generated through access to 340B Drug Discounts [are] sometimes referred to as 340B Savings” and “340B Savings are often a critical component of covered entities’ ability to provide healthcare services to patients.” (Id. at
23-24). Mosaic Health, for example, uses 340B savings to “help fund sliding fee discounted medications for patients in need.” (Id. at 25). “Since its inception, the 340B Drug Discount has been a defined discount, specific to each drug, calculated by the 340B Drug Discount Program.” (Id. at 29). More specifically, Section 340B imposes a ceiling price for a drug, which is “generally equal to the ‘Average Manufacturer Price’ minus a ‘Unit Rebate Amount.’” (Id. at 30). Pharmaceutical companies report their 340B ceiling prices to the Health Resources and Services Administration (“HRSA”) on a quarterly basis, and the HRSA in turn makes those prices available to covered entities via its 340B Office of Pharmacy Affairs Information System (“340B OPAIS”), “an online database that allows covered entities to access ceiling prices for covered outpatient drugs.” (Id. at 31). “Since at least 1996, and in greater volumes since 2010, all drug companies participating in the 340B Drug Discount Program have offered Contract Pharmacy 340B Drug Discounts to covered entities. To do so, drug companies have offered covered entities the 340B Drug Discount on covered outpatient drugs purchased on the covered entities’ own accounts but shipped to their registered Contract Pharmacy sites.” (Id. at 55). A typical arrangement involving a contract pharmacy would work as follows: (1) a covered entity’s patient arrives at a contract pharmacy for a covered outpatient drug; (2) the contract pharmacy, “sometimes itself and sometimes working with a 340B vendor…reviews the pharmacy prescription to identify the patient’s prescription as 340B eligible and to match it to a particular covered entity”; (3) the contract pharmacy fills the prescription with inventory from the purchasing account of the covered entity; (4) the contract pharmacy charges the patient for any required co-pay or fee, “adjusted downward as appropriate by any sliding-fee scale arrangement between the pharmacy and the covered entity”; (5) the contract pharmacy collects reimbursements from any third-parties such as private insurers or Medicare Part D; and (6) the contract pharmacy remits any amounts collected to the covered entity and the covered entity pays the contract pharmacy a dispensing fee. (Id. at 56). Diabetes “is often coincident with low-income populations and in lower-income neighborhoods that are underserved by private healthcare practices” and is “a common area of treatment for 340B covered entity hospitals and clinics.” (Id. at
