A Publix Super Markets pharmacy manager retrieves a medication in Miami. (Photo by Joe Raedle/Getty Images)
The U.S. Supreme Court on Monday let stand a lower court ruling saying Arkansas law requiring drug companies to offer discounts to providers that use outside pharmacies doesn’t conflict with federal law.
The high court declined to hear the appeal of the Pharmaceutical Research and Manufacturers of America, known as PhRMA, case against Arkansas Insurance Commissioner Alan McClain over Act 1103 of 2021.
“This is a big win for Arkansas’ drug-access law,” Attorney General Tim Griffin said in a press release.
PhRMA had appealed a ruling by the 8th U.S. Circuit Court of Appeals that federal law does not preempt Arkansas’ law.
Act 1103 requires pharmaceutical companies to extend federal drug discounts to hospitals that contract with third-party pharmacies. A federal program requires drugmakers to sell outpatient drugs at discounted prices to certain hospitals and other entities serving low-income patients in order to be covered by Medicaid.
Many providers eligible for the program contract with outside pharmacies to dispense prescription drugs so they don’t have to maintain in-house pharmacies.
PhRMA and individual drug manufacturers argued that the state law conflicted with the federal rules covering the 340B Drug Pricing Nondiscrimination Act and sued in the U.S. District Court for the Eastern District of Arkansas. That court’s ruling was appealed to the 8th Circuit.
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“Act 1103 fills a gap in federal law that manufacturers previously exploited to deny equal drug access to rural patients,” Griffin said Monday. “Today’s win means that manufacturers must continue to provide equal access to patients across Arkansas.”
In a statement, a PhRMA spokesperson told Reuters the group continues to believe Arkansas’ law and similar laws are incompatible with federal law, that the use of contract pharmacies under the federal program is prone to “abuse” and that “federal policymakers need to step in to fix this vital safety net program.”
Federal officials in 2010 said providers could contract with an unlimited number of pharmacies instead of just one, as previous guidance allowed.
“For 25 years, drug manufacturers represented by PhRMA distributed 340B drugs to covered entities’ contract pharmacies,” the 8th Circuit’s opinion said. “Then, in 2020, drug manufacturers began implementing distribution policies that limited or prohibited covered entities from contracting with outside pharmacies for the dispensation of 340B drugs to patients. This caused covered entities dependent on contract pharmacies to become unable to serve patients in need.”
Pharmaceutical companies have claimed the wider use of the program leads to abuses such as duplicative discounts and a lack of transparency.
Arkansas became the first state to pass a law against the drug manufacturers’ tightening of discounts.
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Publish date : 2024-12-09 10:38:00
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