Astra USA, Inc., et al. v. County of Santa Clara

Case Updates

The Supreme Court reversed the Ninth Circuit’s ruling that a private plaintiff, as a third party beneficiary, may sue on a government contract when no private right of action has been conferred by the statute governing the contract. The Supreme Court found that suits by 340B entities [including public hospitals, private clinics, and other health centers] to enforce ceiling-price contracts running between drug manufacturers and the Secretary of HHS are incompatible with the statutory regime.

NCLC urged the Supreme Court to reverse a Ninth Circuit decision that a private plaintiff, as a third party beneficiary, may sue on a government contract when no private right of action has been conferred by the statute governing the contract. In this case, the County of Santa Clara alleges its medical clinics were overcharged by Astra USA for pharmaceuticals covered by a federal drug-discounting program. In its brief, NCLC argued that the Ninth Circuit's decision is erroneous as the Supreme Court has never used federal common law to enforce federal statutes lacking a private right of action. NCLC warned that if the decision is allowed to stand, companies that do business with the government would be exposed to burdensome and expensive litigation with the possibility of significant liability.

Previously, NCLC filed an amicus brief urging the Supreme Court to grant certiorari.