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In a big win for the pharmaceutical industry, a federal court judge ruled the U.S. government acted incorrectly when it warned Eli Lilly and several other drug makers they would violate the law by ending discounts to a program that provides medicines to hospitals and clinics serving mostly low-income populations.

The U.S. Department of Health and Human Services took administrative steps that were “arbitrary and capricious” when it warned the companies about curtailing the discounts, the judge wrote in an opinion issued Friday. At the same time, Eli Lilly was criticized for “unilaterally” ending discounts in a way that inhibited the program, and caused some hospitals and clinics to complain they were inappropriately overcharged for medicines.

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