A leading pharmaceutical lobby group has filed a lawsuit to repeal an Arkansas law that requires drugmakers to provide discounted pharmaceuticals under 340B to contract pharmacies.
The lawsuit, filed Wednesday by the Pharmaceutical Research and Manufacturers of America (PhRMA), comes as six drugmakers restricted sales of $ 340 billion of products to contract pharmacies, which sparked a legal clash with the federal government.
PhRMA’s lawsuit, filed in U.S. District Court for the Eastern District of Arkansas, wants the court to find a law passed by the state in May 2021 unconstitutional.
In the 340B program, drug makers agree to offer discounts to safety net providers in return for their participation in Medicare and Medicaid. Drug manufacturers must supply the products at reduced prices to 15 types of covered entities, which may include hospitals and community health centers.
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However, Arkansas law seeks to add contract pharmacies as another covered entity. Contracted pharmacies are third parties that dispense 340B drugs on behalf of 340B providers.
PhRMA argues in its lawsuit that state law is preempted by federal law 340B.
“Contract pharmacies have never been authorized by the US Congress in Federal Law 340B, and Law 340B does not explicitly require manufacturers to ship 340B drugs to contract pharmacies,” according to a PhRMA statement on the lawsuit.
The group also argues that the lawsuit violates the constitution’s commerce clause, which governs interstate commerce.
“The provisions violate this fundamental limitation on state power as they would apply extraterritorially to most members of PhRMA and regulate sales from out-of-state manufacturers to out-of-state wholesalers.” , the group said.
The lawsuit is the latest legal dispute over the access of 340B products to contract pharmacies.
Last summer, half a dozen drugmakers began cutting sales to contract pharmacies. The pharmaceutical industry has argued that the 340B program has grown too big and that the benefits of the discounts are not being passed on to patients.
340B advocates and safety net providers say the program is vital for them to continue providing care, especially as drug prices have risen steadily in recent years.
The Health Resources and Services Administration (HRSA) warned six drugmakers earlier this year to lift restrictions on contract pharmacies. But none of the six drugmakers complied, and the HRSA recently referred them to the Department of Health and Human Services Inspector General’s office for fines for violating Law 340B.
Drug makers could face a fine of $ 5,000 per violation.
But Eli Lilly, one of six drug companies warned by HRSA, sued the federal government in May to try to prevent such sanctions.