April 340Buzz: Ripple effects from Arkansas

The 340B world notched some important victories in March. A three-judge panel of the U.S. Court of Appeals for the Eighth Circuit upheld Arkansas’ first-in-the-nation state law prohibiting drugmakers from restricting the dispensing of 340B drugs at contract pharmacies.

The judges rejected the arguments from the Pharmaceutical Research and Manufacturers of America (PhRMA) that the 340B statute and Food, Drug, and Cosmetic Act, both federal laws, preempt state law, affirming a lower court ruling from 2022.

Circuit Judge Michael Melloy wrote that Arkansas’ state law, passed in 2021, “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. In arguing otherwise, PhRMA presents no evidence of an obstacle.” He added that “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.”

Covered entities and their allies celebrated the decision.

“The court’s ruling rightfully affirms the ability for states to bridge regulatory gaps that are not addressed in federal law and states’ ability to regulate drug distribution and the practice of pharmacy,” said Tom Kraus, vice president of government relations for the American Society of Health-System Pharmacists, or ASHP. Read more >