Powers Pyles Sutter & Verville PC announces that the firm’s 340B Litigation team secured a significant victory in litigation involving the Arkansas state law protecting the delivery of 340B drugs to contract pharmacies.
The case, AstraZeneca Pharmaceuticals LP v. Harris, arose from AstraZeneca’s challenge to the constitutionality of Arkansas Act 1103, a state law protecting healthcare providers’ use of contract pharmacies to dispense medications purchased through the 340B Program. Arkansas Act 1103 prohibits pharmaceutical manufacturers from restricting covered entities’ use of contract pharmacies or denying 340B drug pricing to healthcare providers that use contract pharmacy arrangements.
On March 24, 2024, AstraZeneca sued the Arkansas Insurance Department Commissioner in the U.S. District Court for the Eastern District of Arkansas, arguing that Act 1103 was preempted by federal patent law and violated constitutional protections against interference with contracts and unlawful takings of private property. Powers’ client, Dallas County Medical Center (DCMC), intervened in the lawsuit to defend Act 1103 and the protections it provides to 340B covered entities.
On September 29, 2026, the U.S. District Court for the Eastern District of Arkansas ruled in favor of DCMC and the Commissioner, rejecting AstraZeneca’s legal challenges. In its decision, the Court emphasized that Act 1103 regulates the delivery of discounted medications through contract pharmacies rather than establishing drug prices, which are determined under federal law. As a result, Act 1103 is not preempted by federal patent law, does not violate the Contracts Clause of the U.S. Constitution, and is not an unconstitutional taking of property.
The Powers team serving as primary counsel to DCMC included Ron Connelly, Barbara Straub Williams, William von Oehsen, Hannah Hauer, and Fernando Montoya. The firm also acknowledges the invaluable support provided by Kutak Rock LLP throughout the litigation.
About Powers’ Drug Pricing and 340B Program Practice Group
Powers has extensive experience in 340B Drug Pricing Program law, litigation, regulatory compliance, and policy advocacy. The firm’s Drug Pricing and 340B Program Practice Group advises safety-net hospitals, community health centers, pharmacies, and other healthcare providers on complex federal and state drug pricing laws, 340B contract pharmacy issues, and legal and regulatory developments affecting the program. To learn more, visit https://www.powerslaw.com/practicearea/drug-pricing/.
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About Powers Law
Powers Pyles Sutter & Verville PC (“Powers”) is a Washington, D.C.-based law firm with national practices in healthcare, education, government relations, Indian tribal governments, and nonprofit law. Powers attorneys and professionals are nationally known for their extensive expertise in their practice areas and their commitment to client service. For more information, visit www.PowersLaw.com.