Massachusetts General Hospital and Brigham and Women’s Hospital, two of Boston’s largest employers, have joined three other Massachusetts hospitals in a federal Eli Lilly 340B lawsuit that accuses the drugmaker of cutting off discounted drug prices after the hospitals refused to hand over patient claims data. The complaint was filed Tuesday, Oct. 27, 2026, in U.S. District Court in Boston, and Lilly called the suit an effort to avoid transparency.
The other plaintiffs are Salem Hospital, which is also part of Mass General Brigham, and two UMass Memorial Health hospitals in Worcester and Southbridge: UMass Memorial Medical Center and UMass Memorial Health-Harrington Hospital. The case is Civil Case No. 1:26-cv-14855, a 48-page complaint published by the State House News Service.
The Eli Lilly 340B Lawsuit at a Glance
- Filed: Oct. 27, 2026, U.S. District Court for the District of Massachusetts.
- Plaintiffs: Massachusetts General Hospital, Brigham and Women’s Hospital, Salem Hospital, UMass Memorial Medical Center and UMass Memorial Health-Harrington Hospital.
- Defendant: Eli Lilly and Company, the Indianapolis drugmaker, which also runs a research center in Boston’s Seaport.
- At stake: The hospitals say they face “tens of millions of dollars in annual losses” combined. The complaint does not give a single dollar figure.
- Legal claims: Unfair and deceptive business practices under the Massachusetts consumer protection law, Chapter 93A, and unjust enrichment.
- Relief sought: Court orders blocking Lilly’s data policy and restoring discounted pricing, plus damages that could be doubled or tripled under Chapter 93A, and a jury trial.
What the 340B Drug Discount Program Does
Under the federal 340B Drug Pricing Program, drug companies that want their medicines covered by Medicaid and Medicare must sell outpatient drugs at a discounted “ceiling price” to qualifying hospitals and clinics that treat many low-income and uninsured patients. Hospitals keep the gap between that price and what insurers pay them, and they say the savings pay for services that would otherwise lose money.
Mass General Brigham said it uses the savings to support community health centers, mobile vans that offer heart and cancer screenings, and mobile food markets, the Boston Globe reported. UMass Memorial said its savings fund free care and dental services at 28 public schools, a mobile addiction treatment team and medical respite beds for people who are homeless, according to the hospitals’ release as described by the Globe.
What the Hospitals Allege
According to the complaint, Lilly adopted a policy in January 2026 requiring hospitals to upload pharmacy and medical claims data on 340B drugs to a third-party platform called 340B ESP as a condition of getting the discounted price. The suit says the platform is owned through Second Sight Solutions LLC by Berkeley Research Group, a consulting firm the hospitals describe as private-equity-backed.
The hospitals argue that the data is protected health information under federal privacy law, that the platform’s terms cap the operator’s liability at $100, and that Lilly and its vendor would get broad, lasting rights to use the data. They say federal regulators already run audits and a dispute-resolution process for the abuses Lilly says it wants to prevent, such as a hospital collecting both a 340B discount and a Medicaid rebate on the same drug.
The complaint says Lilly sent letters to MGH, the Brigham and UMass Memorial in April and May 2026 telling them to submit the data, and that it later told wholesalers to stop offering the 340B price to the hospitals. In Salem Hospital’s case, the suit says, Lilly set an Oct. 12 deadline and said the discount would end Oct. 21. “This case is about corporate extortion,” the filing states.
“Our patients trust us with their most personal information and protecting that trust is part of caring for them,” Dr. Patrick Gordan, Salem Hospital’s associate chief medical officer, said in a statement quoted by the Globe.
Lilly’s Response
A Lilly spokesperson said in a statement that the two hospital systems “want to profit from” the program “without transparency,” according to the Globe. “Their lawsuit and refusal to share basic information about their 340B program with Lilly — information they routinely collect and provide to insurers every day — show that these major hospital systems are more concerned with hiding rampant abuse in the program than improving its integrity,” the spokesperson said, as reported by the State House News Service. Lilly has argued that it needs the data to make sure hospitals are not receiving duplicate discounts, the Globe reported.
The Massachusetts case is not the first of its kind. The Globe reported that other hospitals, including Dartmouth-Hitchcock Medical Center in New Hampshire and Tampa General Hospital in Florida, have filed similar suits against Lilly in recent months over the same data requirement.
Our Take: Why It Matters for Boston Business
This section is analysis by The Boston Report and is separate from the sourced reporting above.
The fight puts two pillars of Boston’s economy on opposite sides. Mass General Brigham is one of the state’s largest private employers and anchors the hospital cluster around the West End and Longwood, while Lilly has chosen Boston’s Seaport for its $700 million research center, which the Globe described in its coverage. A drawn-out court battle is unlikely to change Lilly’s local investment, but it shows how pricing disputes in Washington-designed programs land on Boston balance sheets.
For the hospitals, the timing is tight. Our recent coverage of Blue Cross Medicare Advantage cuts shows insurers are also trimming. Losing a discount program that the hospitals say is worth tens of millions of dollars a year adds to that strain, and it comes as MGH continues its large Ragon Building expansion. The bigger question for the industry is precedent: hospitals have argued that if Lilly’s approach stands, other drugmakers could add similar conditions. Readers visiting the campus can find practical details in our Mass General Hospital visitor guide.
What Happens Next
The hospitals have asked for preliminary and permanent injunctions, which means a judge could be asked to rule on interim relief before any trial. No hearing date was listed in the materials reviewed for this article. Lilly’s statement to reporters is its only public response so far in the coverage cited here; its formal answer will come in court filings.
Sources
- Boston Globe: MGH, Brigham, other hospitals sue Eli Lilly, alleging ‘extortion’ in drug discount program (Oct. 27, 2026)
- State House News Service: Claims data, discounts at center of new lawsuit against drugmaker (Oct. 28, 2026)
- Complaint, Case 1:26-cv-14855, U.S. District Court for the District of Massachusetts (PDF)
- Boston Business Journal: Mass General, UMass, three other hospitals sue Eli Lilly over data sharing (Oct. 28, 2026)
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