Arkansas wins discount drug legal battle with Big Pharma after Supreme Court denies appeal

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LITTLE ROCK (KATV) — Monday, the state of Arkansas claimed final victory in its legal battle with Big Pharma when the Supreme Court denied a petition by the Pharmaceutical Research and Manufacturers of America—PhRMA for short—to review a lower court's ruling upholding an Arkansas drug pricing law that PhRMA said was unconstitutional and preempted by federal law.

PhRMA, a trade group representing pharmaceutical giants like Johnson and Johnson, Pfizer, Eli Lilly, and others, had sued Arkansas over a state law passed in 2021 that protected the wider distribution of discounted medication to safety net healthcare providers.

Act 1103 countered attempts by pharmaceutical companies beginning in 2020 to significantly limit what kinds of Arkansas pharmacies could provide drugs discounted under a federal program called 340B that required drug companies participating in Medicaid to sell discounted medication to clinics serving low-income, uninsured, and rural communities.

"They're always trying to figure out ways to create more dollars for themselves," said State Sen. Reginald Murdock, (D), Marianna.

Act 1103, which Murdock co-sponsored, prohibited the exclusion of third-party contract pharmacies from the 340B program.

"We wanted to make sure that that stayed in place so they can help everybody that's receiving these drugs so that people can stay healthy, get healthier," Murdock told KATV.

PhRMA argued that Act 1103 is preempted by federal law and adverse to Section 340B, which restricted who could sell discounted drugs to certain "covered entities" that included safety net hospitals, but not the outside pharmacies they contracted with to sell the discounted medication.

The state argued that the effect of limiting the sale of crucial discounted drugs to covered clinics only would have been detrimental to low-income Arkansans the 340B program is intended to help.

Furthermore, the state argued that third-party contract pharmacies are essential because it would be impossibly expensive for covered clinics to build and maintain their own pharmacies to distribute 340B drugs.

"It's more cost efficient and it's more effective for all—especially for the end user, who is the constituent, because at the end of the day, that is who was going to be affected by it," Murdock said.

In its March 12, 2024 decision upholding Arkansas’ 340B Drug Pricing Nondiscrimination Act, the U.S. Court of Appeals for the 8th Circuit said the following:

Act 1103 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. The Supreme Court's denial of PhRMA's petition Monday means the ruling by the 8th Circuit Court of Appeals continues to stand and ensures that Arkansans under the poverty line will continue to have wider access to more affordable medication.

"I'm just happy that, first of all, the legislature then stood up for the people of Arkansas and the businesses to make sure that we were able to pass it. And then, I'm also glad that the judicial system, the courts, have also stood up and supported it."

"We are happy with the Supreme Court's refusal to consider an appeal of the 8th Circuit ruling upholding the constitutionality of Arkansas Act 1103 relating to the 340b program and contract pharmacies. I believe this was an important step toward protecting patient access to critical pharmacy services throughout our state," said Arkansas Insurance Department Commissioner Alan McClain, who was named as a defendant in PhRMA's lawsuit against Arkansas.

Arkansas Attorney General Tim Griffin put out the following statement in response to the Supreme Court's decision Monday:

This is a big win for Arkansas’s drug access law...Act 1103 fills a gap in federal law that manufacturers previously exploited to deny equal drug access to rural patients. Today’s win means that manufacturers must continue to provide equal access to patients across Arkansas. [ad_1]

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Arkansas wins discount drug legal battle with Big Pharma after Supreme Court denies appeal

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