For years, drug manufacturers have relied on a single U.S. Supreme Court case to fend off lawsuits from safety-net providers: Astra USA, Inc. v. Santa Clara County, decided in 2011. The argument goes like this: because Section 340B does not give covered entities a private right to sue, any claim that touches 340B pricing is off limits.
Indeed, the Pharmaceutical Research and Manufacturers of America (PhRMA) filed an amicus brief arguing that the 340B Drug Pricing Program requires uniform oversight by a single federal arbiter, not a patchwork of whistleblower lawsuits filed across the country. PhRMA warned that allowing False Claims Act suits based on 340B pricing disputes would destabilize the centralized pricing system that the federal government administers and lead to conflicting outcomes across jurisdictions.
Opponents believe that the argument has always been too broad. The Ninth Circuit Court of Appeals’ recent Adventist decision confirms why.
What Astra Actually Held
In Astra, the plaintiff sued drug manufacturers for breaching their pharmaceutical pricing agreements with the government. The Supreme Court held that covered entities were not intended third-party beneficiaries of those contracts and could not sue to enforce them. The Court noted that Congress created a specific administrative process for 340B pricing disputes and that allowing private breach-of-contract suits would produce fragmented enforcement.
Astra was about one thing: whether covered entities could bring contract claims to enforce the pricing agreements between manufacturers and the government. The answer was “no.”
What Astra Did Not Hold
Astra did not hold that every legal claim involving drug pricing is barred. The Supreme Court itself recognized that state law claims arising from independent substantive obligations remain available. The question is whether the claim seeks to enforce 340B directly or whether it arises from a separate legal duty.
How Adventist Draws the Line
The Ninth Circuit applied exactly this distinction. Adventist’s False Claims Act action did not seek reimbursement for 340B overcharges. They sought statutory damages for false claims submitted to the government. The violation of 340B’s pricing formula was related to the claim, but the legal theory was independent.
As the court put it, Adventist sought redress for false claims, not for violations of Section 340B’s ceiling price formula. In addition, the U.S. Department of Justice filed an amicus brief in the case supporting Adventist’s position.
What This Means for Sagebrush’s Lawsuit
Sagebrush’s claims against Amgen follow the same logic. The 340B Program provides background context, but the legal obligations at issue arise independently under state law. Sagebrush’s counsel argued at a hearing that the 340B Program is the background to, not the backbone of, Sagebrush’s claims. Sagebrush lawyers say the Adventist decision supports that framing; claims that arise from independent legal obligations are not blocked by Astra, even when the underlying conduct involves 340B pricing.