Justice GINSBURG, Delivered the opinion of the Court.
Section 340B of the Public Health Services Act, 42 U.S.C.A. § 256b (Oct.2010 Supp.), imposes ceilings on prices drug manufacturers may charge for medications sold to specified health care facilities. Those facilities, here called "340B" or "covered" entities, include public hospitals and community health centers, many of them providers of safety-net services to the poor. The § 340B ceiling-price program (340B Program) is superintended by the Health Resources and Services Administration (HRSA), a unit of the Department of Health and Human Services (HHS). Drug manufacturers opt into the 340B Program by signing a form Pharmaceutical Pricing Agreement (PPA) used nationwide. PPAs are not transactional, bargained-for contracts. They are uniform agreements that recite the responsibilities § 340B imposes, respectively, on drug manufacturers and the Secretary of HHS. Manufacturers' eligibility to participate in state Medicaid programs is conditioned on their entry into PPAs for covered drugs purchased by 340B entities.
It is conceded that Congress authorized no private right of action under § 340B for covered entities who claim they have been charged prices exceeding the statutory ceiling. This case presents the question whether 340B entities, though accorded no right to sue for overcharges under the statute itself, may nonetheless sue allegedly overcharging manufacturers as third-party beneficiaries of the PPAs to which the manufacturers subscribed. We hold that suits by 340B entities to enforce ceiling-price contracts running between drug manufacturers and the Secretary of HHS are incompatible with the statutory regime.
Congress placed the Secretary (acting through her designate, HRSA) in control of § 340B's drug-price prescriptions. That control could not be maintained were potentially thousands of covered entities permitted to bring suits alleging errors in manufacturers' price calculations. If 340B entities may not sue under the statute, it would make scant sense to allow them to sue on a form contract implementing the statute, setting out terms identical to those contained in the statute. Though labeled differently, suits to enforce § 340B and suits to enforce PPAs are in substance one and the same. Their treatment, therefore, must be the same, "[n]o matter the clothing in which [340B entities] dress their claims." Tenet v. Doe, 544 U.S. 1, 8, 125 S.Ct. 1230, 161 L.Ed.2d 82 (2005).
The 340B Program is tied to the earlier-enacted, much larger Medicaid Drug Rebate Program. Adopted by Congress in
Calculation of a manufacturer's "average" and "best" prices, undertaken by the pharmaceutical company, is a complex enterprise requiring recourse to detailed information about the company's sales and pricing. § 1396r-8(k); 42 CFR § 447.500-520 (2010). To enable HHS to calculate the rebate rate for each drug, manufacturers submit the relevant data to HHS on a quarterly basis. § 1396r-8(b)(3). With exceptions set out in the legislation, HHS is prohibited from disclosing the submitted information "in a form which discloses the identity of a specific manufacturer . . . [or] prices charged for drugs by such manufacturer." § 1396r-8(b)(3)(D).
Under § 340B, added in 1992, 106 Stat. 4967, as amended, 124 Stat. 823, manufacturers participating in Medicaid must offer discounted drugs to covered entities, dominantly, local facilities that provide medical care for the poor. See § 256b(a); § 1396r-8(a)(1). The 340B Program, like the Medicaid Drug Rebate Program, employs a form contract as an opt-in mechanism. The 340B Program also draws on the larger scheme's pricing methodology. In their 340B Program contracts with HHS, called Pharmaceutical Pricing Agreements (PPAs), see supra, at 1345, manufacturers agree to charge covered entities no more than predetermined ceiling prices, derived from the "average" and "best" prices and rebates calculated under the Medicaid Drug Rebate Program. § 256b(a)(1); see App. to Pet. for Cert. 165a-171a (PPA § I-II).
If a manufacturer overcharges a covered entity, HRSA may require the manufacturer to reimburse the covered entity; HRSA may also terminate the manufacturer's PPA, § 1396r-8(b)(4)(B)(i), (v); App. to Pet. for Cert. 174a (PPA § IV(c)), which terminates as well the manufacturer's eligibility for Medicaid coverage of its drugs, § 1396r-8(a)(1), (5). Currently, HRSA handles overcharge complaints through informal procedures. Manufacturer Audit Guidelines and Dispute Resolution Process, 61 Fed.Reg. 65412 (1996). The 2010 Patient Protection and Affordable Care Act (PPACA), Pub.L. 111-148, 124 Stat. 119, provides for more rigorous enforcement. The PPACA directs the Secretary to develop formal procedures for resolving overcharge claims. Id., at 826, 42 U.S.C.A. § 256b(d)(3)(A). Under those
Respondent Santa Clara County (County), operator of several 340B entities, commenced suit against Astra and eight other pharmaceutical companies, alleging that the companies were overcharging 340B health care facilities in violation of the PPAs to which the companies subscribed. The County styled its suit a class action on behalf of both 340B entities in California and the counties that fund those entities. Asserting that the 340B entities and the counties that fund them are the intended beneficiaries of the PPAs, the County sought compensatory damages for the pharmaceutical companies' breach of contract.
The District Court dismissed the complaint, concluding that the PPAs conferred no enforceable rights on 340B entities. Reversing the District Court's judgment, the Ninth Circuit held that covered entities, although they have no right to sue under the statute, could maintain the action as third-party beneficiaries of the PPAs. 588 F.3d 1237, 1241 (2009).
We granted certiorari, 561 U.S. ___, 131 S.Ct. 61, 177 L.Ed.2d 1151 (2010),
As the County conceded below and before this Court, see 588 F.3d, at 1249; Tr. of Oral Arg. 45, covered entities have no right of action under § 340B itself. "[R]ecognition of any private right of action for violating a federal statute," currently governing decisions instruct, "must ultimately rest on congressional intent to provide a private remedy." Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1102, 111 S.Ct. 2749, 115 L.Ed.2d 929 (1991). See also Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148, 164, 128 S.Ct. 761, 169 L.Ed.2d 627 (2008); Alexander v. Sandoval, 532 U.S. 275, 286, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). Congress vested authority to oversee compliance with the 340B Program in HHS and assigned no auxiliary enforcement role to covered entities.
Notwithstanding its inability to assert a statutory right of action, the County maintains that the PPAs implementing the 340B Program are agreements enforceable by covered entities as third-party beneficiaries. A nonparty becomes legally entitled to a benefit promised in a contract, the County recognizes, only if the contracting parties so intend. Brief for Respondent 31 (citing Restatement (Second) of Contracts § 302(1)(b) (1979)). The PPAs "specifically nam[e]" covered entities as the recipients of discounted drugs, the County observes; indeed the very object
The County's argument overlooks that the PPAs simply incorporate statutory obligations and record the manufacturers' agreement to abide by them. The form agreements, composed by HHS, contain no negotiable terms. Like the Medicaid Drug Rebate Program agreements, see supra, at 1346, the 340B Program agreements serve as the means by which drug manufacturers opt into the statutory scheme. A third-party suit to enforce an HHS-drug manufacturer agreement, therefore, is in essence a suit to enforce the statute itself. The absence of a private right to enforce the statutory ceiling price obligations would be rendered meaningless if 340B entities could overcome that obstacle by suing to enforce the contract's ceiling price obligations instead. The statutory and contractual obligations, in short, are one and the same. See Grochowski v. Phoenix Construction, 318 F.3d 80, 86 (C.A.2 2003) (when a government contract confirms a statutory obligation, "a third-party private contract action [to enforce that obligation] would be inconsistent with . . . the legislative scheme . . . to the same extent as would a cause of action directly under the statute" (internal quotation marks omitted)).
Telling in this regard, the County based its suit on allegations that the manufacturers charged more than the § 340B ceiling price, see, e.g., Third Amended Complaint in No. 3:05-cv-03740 (ND Cal.), ¶ 1, 65, not that they violated any independent substantive obligation arising only from the PPAs.
The Ninth Circuit determined that "[p]ermitting covered entities to sue as intended beneficiaries of the PPA is . . . wholly compatible with the Section 340B program's objectives" to ensure "that drug companies comply with their obligations under the program and provide [the required] discounts." 588 F.3d, at 1251. Suits like the County's, the Court of Appeals reasoned, would spread the enforcement burden instead of placing it "[entirely] on the government." Ibid. (citing Price
Congress made HHS administrator of both the Medicaid Drug Rebate Program and the 340B Program, the United States observed, Brief for United States as Amicus Curiae 33-34, and "[t]he interdependent nature of the two programs' requirements means that an adjudication of rights under one program must proceed with an eye towards any implications for the other," id., at 34. Far from assisting HHS, suits by 340B entities would undermine the agency's efforts to administer both Medicaid and § 340B harmoniously and on a uniform, nationwide basis.
As earlier noted, see supra, at 1346, the Medicaid Rebate Program's statute prohibits HHS from disclosing pricing information in a form that could reveal the prices a manufacturer charges for drugs it produces. § 1396r-8(b)(3)(D).
It is true, as the Ninth Circuit observed, that HHS's Office of the Inspector General
For the reasons stated, the judgment of the U.S. Court of Appeals for the Ninth Circuit is
Reversed.
Justice KAGAN took no part in the consideration or decision of this case.