White House sides with pharma in pricing case

Drugmakers have a new ally in a court battle over pricing. The Obama administration has sided with pharma in an upcoming Supreme Court fight over whether hospitals and clinics can sue to get drug discounts mandated by the Public Health Service Act. The Justice Department filed a friend-of-the-court brief saying that only the federal government can enforce the drug-discount law, the New York Times reports, and private lawsuits would interfere with that job.

Drugmakers have been forced into settlements over Medicaid pricing, but the plaintiffs in those cases were state governments that claimed their Medicaid programs had been overcharged. And this drug-discount program bypasses state governments altogether; the Public Health Service Act allowed the feds to negotiate pricing deals that would govern costs for drugs sold to hospitals and clinics that serve the poor, as well as children's hospitals, AIDS clinics, and others.

The Supreme Court argument in question involves a suit filed by Santa Clara and Santa Cruz counties against AstraZeneca and other drug companies seeking to recoup alleged overcharges. AZ says there's no evidence of overcharging; the companies said the rules for calculating discounts were "exceedingly complex and technical" and that there was no "single correct way" to calculate the required prices. Arguments are scheduled to begin next week.

- read the NYT story

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