Eighth Circuit Court
PhRMA filed a citation to notify the U.S. Eighth Circuit Court of Appeals in St. Louis that Arkansas is enforcing its 340B contract pharmacy law.

Hospitals Urge Fed. Appeals Court to Uphold Novel Ark. Law Protecting 340B Discounts in Contract Pharmacy Setting

Three groups representing 340B hospitals late last week filed an amicus brief in federal circuit court in support of Arkansas’ novel contract pharmacy law, arguing the law doesn’t conflict with the 340B statute and in fact furthers the goals of the 340B program.

The American Hospital Association, 340B Health, and the Arkansas Hospital Association filed the brief April 14 with the U.S. Eighth Circuit Court of Appeals in St. Louis, defending Arkansas Act 1103, passed in 2021. The first of its kind law bars drug makers from denying access to 340B-priced drugs to providers using contract pharmacies.

Drug industry group Pharmaceutical Research and Manufacturers of America has challenged the law, claiming it conflicts with the 340B statute and must be struck down.  But the hospital groups backed the state’s claim that Act 1103 does not encroach on federal territory.  

“The Arkansas law does not interfere with or intrude upon the 340B program – it advances the very goals Congress had when creating that program in the first place,” the groups said in an April 17 news release. “Without laws like Arkansas Act 1103, drug companies would continue to pad their profits while raising the risk that several Arkansas hospitals would be forced to shut down.”

A federal district court last December found no conflict and upheld the law, and PhRMA appealed the ruling in February. The amicus brief asked the appeals court to affirm the lower court’s ruling.

The groups argued that the state law “furthers Congress’s goal in enacting the 340B program: to enable hospitals to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” 

They noted that Congress did not expressly pre-empt such state laws and that states historically retain power to regulate “public health … the practice of pharmacy, and the regulation of drugs.”   

The state of Arkansas and a group of smaller sized Arkansas 340B covered entities separately asked the court April 10 to back a federal district judge’s decision in December that the state’s novel 340B anti-discrimination law is not preempted by the 340B statute nor by the U.S. Food and Drug Administration’s Risk Evaluation and Mitigation Strategies requirements.

AHA and the other hospital groups made similar arguments saying the Arkansas law does not contravene Food, Drug and Cosmetic Act provisions on drugs that can only be dispensed at specified pharmacies. “Nothing in these provisions authorizes (or requires) contract pharmacies to dispense drugs if they are restricted by federal law or regulations from doing so,” they said.

Contract pharmacies are especially critical in Arkansas as over three quarters of some hospitals’ 340B benefit is accessed via contract pharmacies, the groups said, and state law bars most hospitals from having in-house pharmacies. Also, 340B providers need the contracted sites to get discounts on specialty drugs that treat chronic or serious conditions, they said.

Connecticut, Kansas, Mississippi, Missouri, and Louisiana have introduced bills this year aimed at manufacturers’ contract pharmacy policies, with the Louisiana bill set for a hearing today.

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