By: WISCONSIN LAW JOURNAL STAFF//March 29, 2011//
United States Supreme Court
Public Health
Drug price ceilings
Suits by health care facilities to enforce ceiling-price contracts running between drug manufacturers and the Secretary of Health and Human Services are barred.
As the County has conceded, covered entities have no right of action under §340B itself. Congress vested authority to oversee compliance with the 340B Program in HHS and assigned no auxiliary enforcement role to covered entities. Nonetheless, the County maintains that the PPAs are contracts enforceable by covered entities as third-party beneficiaries. This argument overlooks that the PPAs simply incorporate statutory obligations and record the manufacturers’ agreement to abide by them. The agreements have no negotiable terms. Like the Medicaid Rebate Program agreements, the PPAs provide the means by which drug manufacturers opt into the statutory scheme. A third-party suit to enforce an HHS-drug manufacturer agreement, therefore, is in essence a suit to enforce the statute itself. Telling in this regard, the County based its suit on allegations that the manufacturers charged more than the §340B ceiling price, not that they violated an independent substantive obligation arising from the PPAs.
588 F. 3d 1237, reversed.
09-1273 Astra USA, Inc., v. Santa Clara County
Ginsburg, J.