World and Nation

Drug makers win support by Obama admin. in price dispute

WASHINGTON — The Obama administration, following a lengthy internal debate, has unexpectedly come down on the side of pharmaceutical companies that are accused of overcharging public hospitals and clinics that care for large numbers of poor people.

The administration has told the Supreme Court that the hospitals and clinics cannot sue drug companies to enforce their right to deep discounts on drugs, or to collect reimbursement from companies that overcharge.

It is a classic conflict: a political imperative for the administration — to ensure that inexpensive drugs are available to the poor people who need them — rubbing up against the Justice Department’s fear of an onslaught of lawsuits by clinics and hospitals if the Supreme Court allows them to sue.

Sara Rosenbaum, a professor of health law and policy at George Washington University, said the case raises the question of whether the intended beneficiaries of a government program can enforce their right to assistance that is made available by Congress.

“You can parse the legal issues, as the Justice Department has done,” Rosenbaum said. “But the bottom line is that a lot of poor people and a lot of safety-net providers are not getting the discounts they are supposed to receive.”

The court is being asked to rule in a lawsuit brought by Santa Clara and Santa Cruz Counties in California against AstraZeneca and a number of other drug makers.