Appeals court upholds Louisiana 340B contract pharmacy law

The 5th U.S. Circuit Court of Appeals today affirmed a district court ruling upholding Louisiana's 340B contract pharmacy law. The state law prohibits drug companies from denying hospitals the same 340B discounts for drugs dispensed at community pharmacies that would be provided via in-house pharmacies. Three drug companies - AbbVie, PhRMA and AstraZeneca - challenged the law, arguing that it was unconstitutional in several ways. Rejecting those arguments, the appeals court held that Louisiana's law was not preempted by federal law, did not violate the Fifth Amendment's Takings Clause, did not violate the Constitution's Contract Clause and was not unconstitutionally vague. "States regulate pharmacies - and the distribution of drugs to those pharmacies - every day," the 5th Circuit explained. "Act 358 fits comfortably within that tradition."

The AHA filed friend-of-the-court briefs supporting Louisiana's law last year.