January 10, 2011—The U.S. Supreme Court decided late last week to let the U.S. Solicitor General’s office argue before it on Jan. 19 that 340B drug discount agreements between the federal government and pharmaceutical manufacturers do not grant safety-net providers the right to sue to recover alleged overcharges.
The Court, meanwhile, denied a similar motion by four states and the District of Columbia to be allowed to counter-argue before it on behalf of two California counties that such pricing agreements do, in fact, confer a right to sue.
“Lengthy Internal Debate”
The New York Times, meanwhile, reported today that the Obama administration’s decision to side with the drug manufacturers in the case, Astra USA Inc. v. County of Santa Clara (Case No. 09-1273), came only after “a lengthy internal debate.”
“We really wanted to stand on the sidelines in this case,” an unnamed federal health official told the newspaper. “The Justice Department took the lead in solidifying the government’s position because of a broader concern about the possible impact of the case” beyond the 340B program.
“It is a classic conflict,” the Times wrote, “a political imperative for the administration – to ensure that inexpensive drugs are available to the poor people who need them – rubbing up against the Justice Department’s fear of an onslaught of lawsuits by clinics and hospitals if the Supreme Court allows them to sue.”
Disappointing Yes, Surprising No
The High Court’s decision to deny the states and D.C. permission to participate in the Jan. 19 oral arguments in Astra was a disappointment for safety-net providers but not a big surprise. The justices almost always grant such motions by the federal government but do so much less often for states.
The drug manufacturers might file a final brief in the case this week responding to points made in the counties’ Dec. 13 filing in the suit.