History
  • No items yet
midpage
Astra USA, Inc. v. Santa Clara County
131 S. Ct. 1342
| SCOTUS | 2011
Read the full case

Background

  • Section 340B of the Public Health Services Act imposes ceiling prices on drugs sold to 340B entities; HRSA administers the program.
  • PPAs are uniform form agreements that drug manufacturers sign to participate in 340B, incorporating statutory pricing obligations.
  • 340B entities have no private right of action under §340B itself for overcharges; enforcement is centralized in HHS/HRSA.
  • PPAC (PPACA) adds formal procedures for resolving overcharges, with administrative resolution subject to APA review and potential penalties.
  • Santa Clara County sued Astra and others alleging overcharges under the PPAs; district court dismissed, Ninth Circuit reversed allowing third-party beneficiary theories.
  • The Supreme Court reversed, holding that suits by 340B entities to enforce ceiling-price contracts with manufacturers are incompatible with the statutory regime.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Private right of action under §340B County asserts 340B entities may enforce obligations as third-party beneficiaries. No private right of action exists under §340B itself; enforcement lies with HHS/HRSA. No, private third-party enforcement is not allowed.
Enforceability of PPAs by third parties PPAs create enforceable rights for 340B entities as beneficiaries. PPAs merely incorporate statutory obligations with no negotiable terms or independent rights. PPAs are not enforceable by third-party beneficiaries.
Compatibility with statutory regime Private suits would advance program objectives by ensuring compliance. Private suits would undermine centralized, uniform administration and enforcement by HHS. Suits are incompatible with the statutory regime.
Impact of PPACA enforcement framework Administrative procedures are pending but private actions could proceed meanwhile. PPACA strengthens HRSA enforcement and makes resolutions binding with APA review; private suits conflict with this framework. Private suits conflict with the PPACA-enforced framework.
Disclosure and information access concerns Private actions would help verify ceiling-price violations by obtaining price information. Medicaid rebate disclosures prohibit publicly accessible pricing information; private suits would undermine confidentiality. Private suits would threaten information protection and enforcement integrity.

Key Cases Cited

  • Tenet v. Doe, 544 U. S. 1 (2005) (private-right-of-action analysis hinges on congressional intent)
  • Grochowski v. Phoenix Construction, 318 F.3d 80 (2d Cir. 2003) (third-party beneficiary contract enforcement and government contracts)
  • Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U. S. 148 (Supreme Court 2008) (limits on private rights based on corporate misleading conduct)
  • Virginia Bankshares, Inc. v. Sandberg, 501 U. S. 1083 (1991) (private rights depend on congressional intent to provide a remedy)
  • Alexander v. Sandoval, 532 U. S. 275 (2001) (statutory right to sue must be clearly conferred by Congress)
Read the full case

Case Details

Case Name: Astra USA, Inc. v. Santa Clara County
Court Name: Supreme Court of the United States
Date Published: Mar 29, 2011
Citation: 131 S. Ct. 1342
Docket Number: 09-1273
Court Abbreviation: SCOTUS