A Louisiana judge on Monday defended a new state law that keeps drugmakers from imposing certain restrictions around the federal drug discount program known as 340B.
The decision marks a loss for AstraZeneca, AbbVie and the pharmaceutical industry’s lobbying group PhRMA, which have launched legal campaigns against similar laws in other states. In Louisiana, the groups attacked a state law called Act 358 that prohibits drugmakers from setting limits on the distribution of discounted drugs to third parties known as contract pharmacies.
The 340B program was created to help hospitals serving low-income populations, but the use of contract pharmacies to disperse discounted drugs has skyrocketed. Covered entities contracted 1,300 third-party pharmacies in 2010, compared to about 20,000 in 2017, according to a report from the Government Accountability Office.
Plaintiffs in Louisiana argued that Act 358 is unconstitutional for a variety of reasons. But Judge Robert Summerhays rejected those claims in a consolidated opinion on Monday.
In particular, Summerhays said plaintiffs’ arguments that the state law is preempted by federal law or is “unconstitutionally vague” are “misplaced.” Summerhays also rejected claims that the law violates the Fifth Amendment’s takings clause.
“Because Act 358 does not compel Plaintiffs to directly sell 340B drugs to pharmacies, it is not a taking for purposes of the Takings Clause,” Summerhays said.
AbbVie, AstraZeneca, PhRMA and a handful of other pharma companies have brought legal battles to other states that have passed similar laws, including Missouri, Kansas, Minnesota and Mississippi. PhRMA, AbbVie and AstraZeneca did not respond to requests for comment on Wednesday.