On January 19, 2011, the Supreme Court heard oral argument in Astra USA v. Santa Clara County. A federal statute requires drug makers who participate in the Medicaid program to enter into contracts with the federal government that limit the prices that the companies can charge certain health care providers for their drugs. The question in this case is whether the health care providers can sue the drug makers for violating those price limitations--on the common law theory that the drug makers have violated their contract with the government and that the health care providers are third-party beneficiaries of that contract--even though the contract was required by statute and the statute does not authorize providers to sue drug makers for violations of the statute.
To discuss the case, we have Jeffrey S. Bucholtz, who is a partner in the Appellate Practice Group at King & Spalding. Mr. Bucholtz was on an amicus brief in support of the petitioners.