Background
The 340B Drug Pricing Program requires pharmaceutical manufacturers to offer discounted drugs to covered entities. While federal guidance allows covered entities to partner with contract pharmacies, manufacturers have increasingly restricted the number of such pharmacies. In response, Missouri enacted Senate Bill 751, which prohibits manufacturers from restricting delivery of 340B drugs to contract pharmacies partnered with Missouri covered entities. Novartis challenged the law, alleging violations of the dormant Commerce Clause and federal preemption.
The court’s reasoning
The court reviewed the denial of a preliminary injunction under an abuse of discretion standard. Regarding the dormant Commerce Clause, the court found that Senate Bill 751 regulates only the delivery of drugs within Missouri and does not control wholly out-of-state transactions. The law does not facially discriminate against out-of-state entities, and the burden on interstate commerce is not clearly excessive compared to local benefits. On preemption, the court held that Section 340B does not occupy the field of regulation, and the state law does not conflict with federal objectives since federal law is silent on the number of contract pharmacies allowed.
What it means going forward
The decision upholds Missouri Senate Bill 751, allowing covered entities in the state to partner with multiple contract pharmacies without restriction from drug manufacturers. This aligns Missouri with other states that have enacted similar legislation to protect the 340B Program’s distribution model.