The plaintiffs contend that the militia group Jaysh al-Mahdi, sponsored by Hezbollah, controlled Iraq's health ministry and that the 21 defendant US and European medical equipment and pharmaceutical companies made corrupt payments to obtain medical-supply contracts.
Representatives from the five corporate groups - AstraZeneca, GE Healthcare USA Holding, Johnson & Johnson Pfizer and Hoffmann-La Roche Inc said in a joint statement "further proceedings will show the companies are not responsible in any way."
The lawsuit revived by the US Court of Appeals for the District of Columbia Circuit was brought by family members of victims of attacks in Iraq by the Mahdi group. A federal trial judge dismissed the lawsuit in 2020.
Lawyer Kannon Shanmugam, who argued the appeal on behalf of the companies, did not immediately comment.
The lawyer for the family members, Joshua Branson, also did not immediately comment.
Lawyers for the companies told the appeals court that they provided the Iraqi government "life-saving breast cancer treatments, hemophilia injections, ultrasounds, electrocardiogram machines, and other medical goods" after the US-led invasion of Iraq toppled strongman president Saddam Hussein in 2003.
Shanmugam said in court in September that a ruling against the companies "would have a severe chilling effect on the willingness of companies and non-governmental organizations to conduct essential activities, often at the government's request, in troubled regions."