Supreme Court To Hear Case on Alleged Rx Drug Overcharging
On Tuesday, the Supreme Court announced that it would hear an appeal from six large pharmaceutical companies over a 2005 ruling that they overcharged for prescription drugs in violation of a federal law, Reuters reports.
The six companies are:
- Bristol-Myers Squibb;
- Merck; and
The firms are appealing charges that they violated federal law requiring them to give equal discounts to federally funded medical facilities under Medicaid, as well as those under standard pricing agreements between the federal government and the companies.
The case stems from a 2005 lawsuit filed by Santa Clara County, which alleged that from 2001 to 2005 the companies overcharged several federally funded hospitals and health clinics the county operates.
The suit initially was dismissed by a federal judge, who said that only the federal government had the power to enforce the law.
However, a U.S. appeals court overruled the judge, saying that the county was a direct beneficiary of the pricing agreements, that it had the right to enforce the discounts and that it could sue drug companies for reimbursement.
The Supreme Court is expected to hear arguments on the case early next year and a ruling is likely in June 2011 (Vicini, Reuters, 9/28).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.