Case Explained: AbbVie, Incorporated; Allergan, Incorporated; Durata Therapeutics, Incorporated; AbbVie Products, L.L.C.; Aptalis Pharma US, Incorporated; Allergan Sales L.L.C.; Pharmacyclics, L.L.C. Plaintiffs— v. Liz Murrill

Court: United States Court of Appeals for the Fifth Circuit

Filed: 2026-07-06

The Fifth Circuit affirmed the district court’s grant of summary judgment in favor of Louisiana and its intervenor, affirming that Louisiana Act 358 is not preempted by federal law and does not violate the Takings Clause, the Contracts Clause, or the Due Process Clause’s prohibition on vagueness. The court held that the statute, which prohibits drug manufacturers from interfering with covered entities’ use of contract pharmacies to dispense Section 340B drugs, falls within traditional state police powers over public health and consumer protection. Regarding preemption, the court applied a presumption against preemption in areas traditionally reserved to the states, finding that Congress left the distribution of drugs and the role of pharmacies unregulated under 42 U.S.C. § 256b, thereby allowing state supplementation. The court rejected conflict preemption arguments, noting that the federal enforcement scheme and the state law operate in distinct spheres without creating an impossibility of compliance or an obstacle to congressional objectives. On constitutional grounds, the court ruled that Act 358 does not effect a physical or regulatory taking under the Fifth Amendment because it imposes a negative obligation of non-interference rather than compelling a transfer of property, and it does not substantially impair contractual obligations under the Contracts Clause since the federal pricing agreements did not address delivery logistics to contract pharmacies. Finally, the court determined the statute is not unconstitutionally vague, concluding that the term “interfere” is sufficiently clear when read in context with neighboring terms like “deny,” “restrict,” and “prohibit.” The practical consequence is that Louisiana Act 358 remains enforceable against pharmaceutical manufacturers participating in the Section 340B Program.

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