October 15, 2010—A federal district judge in San Francisco has halted proceedings in a pivotal 340B lawsuit pending a U.S. Supreme Court decision on whether 340B providers have the right to sue drug manufacturers for alleged overcharges.
As previously reported in the Monitor, the High Court has decided to review a federal appellate court decision recognizing covered entities’ right to sue. The case is Astra v. Santa Clara (Case No. 09-1273). The justices will be focusing strictly on this one facet of the dispute and not deciding whether the drug companies overcharged the California providers.
Hearing and Ruling in 2011
The Supreme Court will hear arguments in the dispute no sooner than mid-January. Within three days after it issues its decision, which is expected by early July, the drug companies being sued must contact the trial judge to schedule a conference. If the Supreme Court rules in their favor, the trial judge will probably dismiss the suit.
340B provider groups are expected to file a friend-of-the-court brief supporting the California counties and covered entities that are suing the nine drug manufacturers named as defendants.
Kagan Out, Roberts In
Associate Justice Elena Kagan, the High Court’s newest member, recused herself from consideration of the case due to her prior involvement in earlier phases as U.S. Solicitor General, meaning that it will be decided by only eight of the nine justices. In the event of a tie, the federal circuit court ruling in the providers’ favor will be left standing.
Shortly before the Court held its conference during which it accepted the drug companies’ appeal, Chief Justice John Roberts Jr. sold his stock holdings in Pfizer, one of the firms accused of overcharging. The sale allowed him to participate in both the Astra case and another on whether a federal law on vaccine injuries shields manufacturers from certain product-liability lawsuits.