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Medicaid Act Enforceable by State as 3rd Party Beneficiary of Federal Contract

Wednesday, April 27, 2005

A Massachusetts district court has held that there is no implied right of action allowing a state to enforce the Medicaid Best Prices Statute, 42 U.S.C. ยง 1396r-8, against drug manufacturers who reported false prices to the federal government and thus underpaid rebates due to the state. However, the state may enforce the statute indirectly as a third-party beneficiary of the contract between the federal government and the drug companies. Massachusetts v. Mylan Laboratories, 357 F.Supp.2d 314 (2005). The decision may not, however, be especially helpful to individuals seeking to enforce contracts with the federal government...
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