Piggott community hospital ambulance
A federal judge is letting Piggott Community Hospital in northeastern Arkansas and Community Health Centers of Arkansas intervene in PhRMA's lawsuit challenging a state law protecting 340B contract pharmacy arrangements.

Fed. Judge Lets 340B Providers Intervene in Closely Watched Contract Pharmacy Lawsuit

A federal district judge on Tuesday let Arkansas’ state health center association and a critical access hospital in the state have a role in the drug industry’s lawsuit challenging the state’s one-of-a-kind law protecting 340B contract pharmacy arrangements.

U.S. Senior District Judge Billy Roy Wilson granted Community Health Centers of Arkansas (CHCA) and Piggott Community Hospital’s motion to intervene in the case on May 3.

A May 2021 state law says drug 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.

Pharmaceutical Research and Manufacturers of America (PhRMA) sued in federal district court in Little Rock, Ark., in September 2021 to have the law struck down as illegal and unconstitutional.

CHCA and the hospital sought permission to intervene in the case in March, arguing that their interests and the state’s interests are not aligned. They pointed to a proposed rule to implement the law that would require covered entities to proceed first through the federal 340B administrative dispute resolution (ADR) process before bringing a claim against a manufacturer under the law. This requirement appears nowhere in the law, they said.

The health centers and the hospital also pointed out that the state has stayed enforcement of the law at PhRMA’s request over their objections.

PhRMA told the judge it did not oppose CHCA and the hospital’s motion to intervene. The state, which is defending the law, never responded to the motion.

“Because intervenors have demonstrated recognizable economic interests in the present lawsuit, their alleged interests … are sufficiently direct, substantial, and legally protectable to allow them to intervene in the case,” Wilson wrote in his order granting CHCA and the hospital’s motion.

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