U.S. Supreme Court Upholds Arkansas Drug Access Law in Victory for State

Arkansas scored a major legal victory last week when the U.S. Supreme Court declined to hear an appeal from large pharmaceutical manufacturers, effectively upholding the state’s drug access law, Act 1103 of 2021. The decision means that the law remains in effect, ensuring that hospitals can use contract pharmacies without financial penalties under the federal 340B drug pricing program.

The 340B program requires pharmaceutical companies to offer discounts to eligible hospitals, allowing them to pass savings on to patients or reinvest in services. However, some pharmaceutical manufacturers had refused to offer these discounts to contract pharmacies, which are often more convenient for patients than in-house hospital pharmacies.

Act 1103 was passed with bipartisan support and had already been upheld by a federal judge and the Eighth Circuit Court of Appeals. It ensures that hospitals across Arkansas, which often rely on contract pharmacies, can continue to access discounts without facing penalties from drug manufacturers.

Pharmaceutical manufacturers, led by the trade group PhRMA, had challenged the law, claiming it was unconstitutional and interfered with federal regulations. However, the Supreme Court’s decision to allow the lower court rulings to stand effectively affirms the constitutionality of Act 1103.

Arkansas is the first state to enact such a law, with Louisiana and several other states following suit in recent years.