Pharmaceutical Research and Manufacturers of America v. Alan McClain, in His Official Capacity as Commissioner of the Arkansas Insurance Department, et al.

This Nation’s second largest drug program, the federal 340B Drug Pricing Program (340B), is administered by the U.S. Department of Health and Human Services (HHS) and effectuated through a contract between the federal government and drug manufacturers. It requires manufacturers to offer heavily discounted prescription drugs to certain statutorily enumerated healthcare entities called “covered entities.” The D.C. and Third Circuits have held that HHS cannot require drug manufacturers to deliver 340B-priced drugs to an unlimited number of third-party “contract pharmacies,” because Congress “preserved” manufacturers’ ability to impose conditions on the delivery of 340B-priced drugs as part of their offers, including as to the use of contract pharmacies. And this Court has previously held that the federal government alone possesses exclusive administrative and enforcement authority over 340B. Nevertheless, Arkansas and a growing number of other States have enacted laws forbidding manufacturers from imposing contract-pharmacy conditions—something even HHS cannot do. In the decision below, the Eighth Circuit blessed Arkansas’s law, permitting the State to impose its own preferred obligations and enforcement scheme on 340B. The question presented is: Whether the Eighth Circuit erred in holding—in conflict with the decisions of other circuits and this Court—that a State may strip manufacturers of the ability preserved to them by 340B to impose conditions on the use of contract pharmacies as part of the offer to provide 340B-priced drugs and intrude on 340B’s centralized enforcement scheme.