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, holding that 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 applied the presumption against preemption, reasoning that public health and consumer protection are areas traditionally reserved to state police powers and that Congress did not clearly manifest an intent to supersede state regulation of drug distribution logistics in the Section 340B Drug Pricing Program. The court found no field preemption because the federal statute is silent on contract pharmacies; no conflict preemption because compliance with both laws is possible and they regulate distinct spheres (federal enforcement of pricing versus state enforcement of delivery); and no obstacle preemption because the state law advances, rather than frustrates, the federal goal of providing discounted drugs to vulnerable populations. Regarding constitutional claims, the court held that Act 358 does not effect a physical or regulatory taking under the Fifth Amendment because it imposes only a negative obligation of non-interference rather than compelling a transfer of property. The court further ruled that the statute does not substantially impair contractual obligations in violation of the Contracts Clause, as the federal pricing agreements do not address delivery to contract pharmacies and manufacturers operate in a heavily regulated industry with notice of potential state regulation. Finally, the court rejected the void-for-vagueness challenge, concluding that the term “interfere” is sufficiently clear when read in context with neighboring terms like “deny,” “restrict,” and “prohibit.” Consequently, Louisiana’s Act 358 remains enforceable against pharmaceutical manufacturers.

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