On September 30, 2024, a federal Louisiana District Court in Pharmaceutical Research and Mfrs Of America v. Murrill, ruled against several pharmaceutical manufacturers and a manufacturer lobbying group who argued that a Louisiana state law was preempted by the federal 340B drug discount program. At issue in the case was Louisiana’s Act 358 (“Act 358”), which prohibited drug manufacturers and distributors from denying, restricting, prohibiting, or otherwise interfering with a 340B Covered Entity’s contract pharmacy arrangements. Act 358 effectively prohibits manufacturers from restricting delivery to a contract pharmacy of prescriptions eligible for 340B pricing.
In its ruling, the district court rejected the manufacturers’ arguments that such state rules violated and were preempted by the federal 340B program, and similarly rejected the manufacturers’ arguments that Act 358 impermissibly expanded the definition of “Covered Entity” to include contract pharmacies. The court noted that Act 358 did not expand or contradict the statutory definition of a 340B Covered Entity, and instead the state law merely addressed the delivery and acquisition of 340B drugs through contract pharmacy arrangements.
Notably, this is not the first time that a federal court addressed state laws prohibiting discrimination against 340B Covered Entities utilizing contract pharmacy arrangements to deliver covered outpatient prescription drugs. Earlier this year, the Eight Circuit in Pharmaceutical Research and Mfrs of America v. McClain similarly upheld an Arkansas state law that prohibited manufacturers from restricting the provision of 340B drugs to Covered Entities using contract pharmacies. The trend of federal court decisions suggests future manufacturer opposition to contract pharmacy anti-discrimination laws may similarly fail.
However, and further adding to the complexity and uncertainty surrounding contract pharmacy relationships, federal courts have recently upheld pharmaceutical manufacturers’ contract pharmacy restrictions (in the absence of state contract pharmacy anti-discrimination laws). Therefore, it is of paramount importance that 340B stakeholders, including Covered Entities and contract pharmacies, have their 340B programs reviewed for compliance with current state law, as well as compliance with potentially enforceable pharmaceutical manufacturer restrictions. Frier Levitt attorneys have experience in assisting 340B Covered Entities and contract pharmacies navigate 340B policies, procedures, and requirements, as well as guide 340B stakeholders through applicable restrictions to maintain compliance.
