Little Rock, ARK — Arkansas has emerged victorious in its legal fight against pharmaceutical companies after the U.S. Supreme Court declined to hear a challenge to the state’s drug pricing law, Act 1103. The decision marks the final chapter in a legal dispute that has spanned several years and was closely watched by both state and national healthcare advocates.
At the heart of the case is Act 1103, a state law passed in 2021 designed to protect the distribution of discounted medications to low-income and underserved communities in Arkansas. The law was challenged by the Pharmaceutical Research and Manufacturers of America (PhRMA), a powerful trade group that represents major pharmaceutical companies such as Johnson & Johnson, Pfizer, and Eli Lilly. PhRMA argued that the law was unconstitutional and preempted by federal law, particularly Section 340B of the Public Health Service Act.
The 340B program, a federally mandated drug discount program, requires drug manufacturers to sell medications at reduced prices to certain “covered entities” like safety-net hospitals and clinics that serve low-income, uninsured, and rural populations. However, the pharmaceutical industry has sought to limit the number of pharmacies allowed to dispense these discounted drugs, arguing that some third-party pharmacies were inappropriately benefiting from the program.
Act 1103, co-sponsored by State Senator Reginald Murdock (D-Marianna), sought to counter these attempts by ensuring that third-party contract pharmacies could continue to distribute 340B drugs. The law is crucial for ensuring that clinics in Arkansas can provide affordable medications to those in need, especially as it is often cost-prohibitive for these clinics to build and operate their own pharmacies.
In its March 2024 decision, the U.S. Court of Appeals for the 8th Circuit ruled that Act 1103 did not create an obstacle for pharmaceutical manufacturers to comply with the 340B program. The court emphasized that the law actually supported the objectives of the 340B program by ensuring broader access to discounted medications for vulnerable populations in Arkansas.
PhRMA had sought a Supreme Court review of the 8th Circuit’s decision, but the Court’s denial of their petition means the appellate ruling stands. This outcome ensures that Arkansas residents living under the poverty line will continue to have greater access to affordable medications through the 340B program.
“I’m just happy that, first of all, the legislature stood up for the people of Arkansas and the businesses to make sure we were able to pass it,” said Senator Murdock, reflecting on the legal victory. “And I’m also glad that the judicial system, the courts, have also stood up and supported it.”
The ruling is seen as a significant win for patient access to critical healthcare services, particularly for those in rural and underserved areas. Arkansas Insurance Department Commissioner Alan McClain, who was named as a defendant in the lawsuit, also expressed relief at the Supreme Court’s decision.
“We are happy with the Supreme Court’s refusal to consider an appeal of the 8th Circuit ruling,” McClain said. “I believe this was an important step toward protecting patient access to critical pharmacy services throughout our state.”
The case highlights ongoing tensions between state-level efforts to ensure affordable healthcare and the influence of the pharmaceutical industry, which has long argued that such regulations can undermine their business practices. However, for now, the people of Arkansas have secured a victory, ensuring that the distribution of discounted medications continues to reach those most in need.