Supreme Court Rules 340B Covered Entities Cannot Sue Drug Manufacturers Over Drug Pricing Disputes


On March 29, 2011, the Supreme Court, in a unanimous opinion by Justice Ruth Bader Ginsburg, ruled that safety-net health care providers, such as eligible hospitals and community health centers, enrolled in the federal 340B Drug Discount Program (the “340B Program”) do not have a right to sue drug manufacturers for alleged overpricing of drugs they sell under the program.

The Supreme Court issued the ruling in Astra USA Inc. v. County of Santa Clara, a class action suit in which Santa Clara County, on behalf of the health care providers enrolled in the 340B Program (“Covered Entities”) in California and also on behalf of California county governments that provide funding for Covered Entities, alleged that nine drug manufacturers charged them prices above the 340B Program’s statutorily defined maximum prices, which are known as “340B Ceiling Prices.”

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