Five Massachusetts Hospitals Sue Eli Lilly in Boston Over 340B Discounts, Their System's Second Federal Fight on the Issue

Five Massachusetts hospitals sued drugmaker Eli Lilly and Company in federal court in Boston on Tuesday, alleging the company unlawfully stopped giving them discounted prices under the federal 340B drug pricing program after they refused its demand for patient claims data. The plaintiffs are Massachusetts General Hospital, Brigham and Women's Hospital, Salem Hospital, UMass Memorial Medical Center and UMass Memorial Health-Harrington, the Boston Globe reported.

The 340B program requires drug manufacturers that participate in Medicaid to sell outpatient drugs at discounted "ceiling prices" to hospitals and clinics that serve large numbers of low-income and uninsured patients. The hospitals use the savings for charity care and community health services, according to a summary of the complaint by Medicaid Monitor.

"This case is about corporate extortion," the complaint says, according to the Globe. "Lilly, the largest pharmaceutical company in the world and the first in history to achieve a trillion-dollar market capitalization, is using its monopoly power to hold vital 340B drug savings hostage." Those are the hospitals' allegations; a complaint is not a finding.

According to Medicaid Monitor's summary, the dispute centers on a Lilly policy that took effect in January requiring hospitals to submit claims data through a third-party platform, 340B ESP, to receive the discounts. The hospitals say the data demand risks exposing protected health information and that Lilly's stated purpose, preventing duplicate discounts, is pretextual because federal regulators already have an oversight process for that. The summary says Lilly began denying ceiling prices to noncompliant hospitals on June 18, with cutoffs reaching different plaintiffs through Oct. 21.

The hospitals bring claims under the Massachusetts consumer protection law, Chapter 93A, and for unjust enrichment, and seek an injunction and damages, the summary says. The Globe reported that the suit alleges Lilly withheld "tens of millions of dollars" in discounts. Law360 reported the case is General Hospital Corporation et al. v. Eli Lilly and Company.

Lilly disputed the suit. The Globe reported that the company, based in Indianapolis with a research center in Boston's Seaport, "decried the lawsuit." The company's statement, as excerpted by the Globe, begins: "Congress created the 340B program to help vulnerable..."

The new complaint is not Mass General Brigham's first federal case against Lilly. A public docket listing on Justia shows a case titled Mass General Brigham Incorporated v. Eli Lilly and Co. et al., No. 2:25-cv-16179, filed in 2025 in the U.S. District Court for the District of New Jersey. Becker's Hospital Review has tracked a series of hospital lawsuits over Lilly's 340B claims-data requirement. The Boston complaint shifts the dispute to a Massachusetts court and adds state-law claims and UMass Memorial as a plaintiff.

What remains unknown: Lilly's full response in court, whether the hospitals will seek emergency relief to restore pricing while the case proceeds, and the exact dollar amount each hospital says it has lost.