JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC. v. BECERRA
1:24-cv-03188
D.D.C.May 15, 2025Background:
- Johnson & Johnson Health Care Systems Inc. (J&J) sued the Department of Health and Human Services (HHS) and the Health Resources and Services Administration (HRSA) regarding the 340B Drug Pricing Program, which mandates drug manufacturers sell drugs at a discount to certain providers.
- In 2024, J&J attempted to switch from offering upfront discounts to a rebate model, requiring healthcare entities to pay full price upfront and receive rebates later for certain drugs.
- HRSA rejected J&J's proposed rebate model, prompting J&J to file suit for declaratory and injunctive relief.
- 340B Health (an advocacy organization), UMass Memorial Medical Center, and Genesis HealthCare sought to intervene as defendants, claiming the new rebate model would financially injure them.
- The court addressed both the standing of these entities to intervene and their eligibility to do so as a matter of right under Federal Rule of Civil Procedure 24(a).
- The court also considered their motion for leave to file an oversized amicus brief, which it ultimately did not address due to granting intervention.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing and right to intervene | Intervenors lack standing and a legally protected interest | Intervenors face concrete financial injury from the rebate model | Intervenors have standing and meet Rule 24(a) for intervention |
| Adequacy of representation by existing parties | Government defendants can adequately represent intervenors | Their interests diverge from current defendants; require separate representation | Intervenors' interests not adequately represented by current parties |
| Applicability of Supreme Court’s Astra decision | Astra prevents covered entities from intervening | Intervention does not require an independent cause of action | Astra does not bar intervention when standing and interest are shown |
| Financial injury from rebate model | No unreasonable economic harm; rebate period is short | Rebates cause significant cash flow issues and administrative burdens | Financial injury is concrete and supports intervention |
Key Cases Cited
- Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992) (establishes requirements for Article III standing, including concrete injury)
- Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333 (1977) (sets criteria for associational standing for organizations)
- Astra USA, Inc. v. Santa Clara County, 563 U.S. 110 (2011) (discusses limits on private enforcement of the 340B statute)