Supreme Court Rejects 340B Pricing Case

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Covered Entities Have No Right to Sue Manufacturers to Enforce Pricing Agreements; HHS Retains Exclusive Authority Over the Drug Discount Program

In a unanimous opinion, the Supreme Court last week held that 340B covered entities may not sue drug manufacturers for alleged violations of the 340B Pharmaceutical Pricing Agreement (PPA). Only the federal government may enforce the terms of that agreement. This decision stems a potential flood of private litigation against drug and biologics manufacturers regarding 340B and Medicaid pricing.

Justice Ginsburg authored the Court’s 8-0 opinion reversing the Ninth Circuit Court of Appeals. Justice Kagan took no part in consideration of the case.

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