Arkansas's insurance commissioner is ending PhRMA's state administrative proceeding to stop his department from implementing and enforcing the state’s 340B contract pharmacy law.

Arkansas Ending PhRMA Proceeding Against State 340B Contract Pharmacy Law as Focus Turns to Federal Lawsuit

The Arkansas Insurance Department (AID) is ending the drug industry’s state administrative proceeding to stop the department from implementing and enforcing the state’s novel 340B contract pharmacy law.

In his Oct. 5 order ending the proceeding, Insurance Commissioner Alan McClain cited Pharmaceutical Research and Manufacturers of America’s (PhRMA) federal lawsuit to have the law, Act 1103, declared unconstitutional. McClain said a parallel state proceeding “is not legally feasible given that any ruling by the United States district court would ultimately be controlling over any ruling made in the department declaratory proceeding.”

Act 1103 says manufacturers shall not:

  • Prohibit a pharmacy from contracting or participating with an entity authorized to participate in 340B drug pricing by denying access to drugs that are manufactured by the pharmaceutical manufacturer; or
  • Deny or prohibit 340B drug pricing for an Arkansas-based community pharmacy that receives drugs purchased under a 340B drug pricing contract pharmacy arrangement with an entity authorized to participate in 340B drug pricing.

It was supposed to take effect on July 28. PhRMA filed the state action on July 29. Its petition sought to stay Act 1103’s enforcement pending the outcomes of six federal lawsuits by drug manufacturers challenging federal agency findings that the 340B statute requires them to provide 340B drug discounts when covered entities use contract pharmacies.

McClain stayed the law’s enforcement until Oct. 29 to let a hearing officer consider and rule on PhRMA’s petition. The officer held a hearing on the matter on Sept. 10.

McClain’s Oct. 5 order closes the book on PhRMA’s petition on Oct. 29, the day that his stay expires.

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