Hospital groups have filed a legal brief urging a federal court to reject drug manufacturers’ challenge to a Louisiana law that allows state hospitals to receive drug discounts dispensed at community pharmacies under a federal program.
The Louisiana Hospital Association, American Hospital Association and other groups filed the amicus brief in the Western District of Louisiana on Dec. 22. The brief urges the court to reject the claims of plaintiffs AstraZeneca Pharmaceuticals and the Pharmaceutical Research and Manufacturers of America (PhRMA) concerning the federal 340B drug-discount program.
Under that program, pharmaceutical companies that take part in the Medicaid and Medicare Part B programs are required to provide cost reductions for drugs sold to patients of certain nonprofit hospitals and community health centers.
The plaintiffs are challenging Louisiana’s Act 358, which says that drug companies must provide the same 340B discounts for drugs provided through community pharmacies as is done for in-house pharmacies. The plaintiffs’ efforts to curb Louisiana’s exercise of its powers to protect human health and safety should be rejected, according to the amicus brief.
““PhRMA and AstraZeneca cannot demonstrate that Congress intended to create or occupy any field through its 340B legislation,” the brief says. “Nor does Louisiana law conflict with the federal 340B statute. In reality, it furthers Congress’ goal in enacting the 340B program: to enable hospitals to ‘stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.’”
The drug discounts help Louisiana patients because they allow hospitals to use the money saved to provide patient transportation, deliver medicines to patients’ homes and keep the costs of specialty drugs reasonable, according to the legal brief.
Some drug makers began refusing to offer the drug discounts to community pharmacies in July 2020, the brief says.
“Recognizing an opportunity to pad its profits, AstraZeneca quickly followed suit, as did 27 other major drug companies,” the amicus brief states.
In response to a query, PhRMA referred the Louisiana Record to a previous comment by James Stansel, PhRMA’s executive vice president and general counsel, about the association’s reasoning for filing the litigation.
“We filed a complaint because the 340B drug pricing program is a comprehensive federal program that is governed exclusively by the federal government,” Stansel said in his statement. “Louisiana’s attempt to put state mandates and rules in place regarding the operation of a federal program violates the supremacy clause of the U.S. Constitution.”
He noted that the phrase “contract pharmacy” does not appear in the federal statute. In fact, pharmacies are not listed in the law as one of the groups qualifying for the 340B drug discounts, according to Stansel.
“Louisiana has no authority to place requirements on how manufacturers engage in the 340B program, let alone create new requirements that are not in the federal statute to begin with or that conflict with requirements in the statute,” he said. “The court should declare Louisiana Act 358 unconstitutional.”
In Louisiana, 90% of some hospitals’ 340B benefits are the result of pharmaceuticals dispensed at community pharmacies, according to hospital associations’ amicus brief.