Santa Cruz County has long believed that major drug companies are overcharging for their medicines. Rama Khalsa, administrator of the county’s Health Services Agency, believes that they have proved that now, following a case before the Supreme Court. Unfortunately, there is little the county can do about it. The Supreme Court voted 8-0 to toss out the case.
The case began in 2005, when Santa Cruz and Santa Clara counties filed suit against the countries leading drug companies, including AstraZeneca, Bayer, Bristol-Meyers Squibb, and Pfizer. They argued that the companies were failing to follow a law that required them to charge counties the lowest available prices for their medicines. The county now spends approximately $700,000 on life-saving drugs for impoverished residents who could not otherwise afford them.
Rather than focus on the costs, the case came to focus on whether individual counties have the authority to sue the drug companies. According to the drug companies, only the federal government has that right, a position endorsed by no less than President Barack Obama. As such, it would be the responsibility of the Department of Health and Human Services to sue, if they so desired. Despite the prodding of Representatives Sam Farr (D-Carmel) and Anna Eshoo, (D-Palo Alto), there is no indication that the DHHS will act on the matter.
The ruling has infuriated local officials, not least among them Rama Khalsa: “Here you are in the middle of health care reform,” she said, “trying to contain costs and provide affordable care, and the Supreme Court rules that drug companies can basically take money that they’re not owed from local, nonprofit, safety net providers and not have to give it back.”
The ruling was written by Justice Ruth Bader Ginsburg. Justice Elena Kagan did not participate in the case.
Read more at the Santa Cruz Sentinel and Business Journal.
