On March 12, a federal appeals court upheld an Arkansas law, ruling that drugmakers cannot restrict 340B program offerings from community and specialty pharmacies.
The case involved the Pharmaceutical Research and Manufacturers of America — a powerful lobbying group for drugmakers — the Arkansas Insurance Department, North Little Rock-based Community Health Centers of Arkansas, and Piggott Community Hospital. PhRMA filed a lawsuit against Arkansas' 340B Drug Pricing Nondiscrimination Act, which secures contract pharmacies in the 340B program.
340B is a 30-year-old program that enables eligible healthcare facilities, called safety-net hospitals, to purchase discounted drugs and pass those savings onto patients. In 2020, pharmaceutical companies began refusing to sell the discounted medicines to outside pharmacies that contract with covered entities, according to court documents.
In response, Arkansas passed the nondiscrimination legislation, Act 1103, and PhRMA filed a lawsuit in the U.S. District Court for the Eastern District of Arkansas alleging the state law is preempted by federal law. The 8th Circuit Court of Appeals' decision affirms the District Court's decision that Act 1103 is not preempted by federal law.
The American Hospital Association, Arkansas Hospital Association and 340B Health filed friend-of-the-court briefs against PhRMA in the appeal.
"Act 1103 does not create an obstacle for pharmaceutical manufacturers to comply with 340B, rather it does the opposite: Act 1103 assists in fulfilling the purpose of 340B," the U.S. Court of Appeals for the 8th Circuit said in its decision. "… Arkansas is simply deterring pharmaceutical manufacturers from interfering with a covered entity's contract pharmacy arrangements. There is no obstacle for pharmaceutical manufacturers to comply with both Act 1103 and Section 340B."
The AHA and American Society of Health-System Pharmacists celebrated the news during a time when more than 20 drugmakers have limited their offerings to contract pharmacies.
A PhRMA spokesperson told Becker's the organization disagreed with the decision but did not indicate whether it planned to appeal.