On February 9, 2026, Powers Pyles Sutter & Verville’s 340B Healthcare Litigation Team received a favorable decision from the U.S. Court of Appeals for the Fifth Circuit for its client, the Louisiana Primary Care Association (“LPCA”), upholding Louisiana’s 340B Contract Pharmacy Protection Law (“Act 358”).
Enacted in 2023, Act 358 prohibits drug manufacturers from restricting, denying, or interfering with the delivery of 340B-priced drugs to pharmacies contracted with 340B covered entities. AbbVie, AstraZeneca, and the Pharmaceutical Research and Manufacturers of America (“PhRMA”) each filed lawsuits in the U.S. District Court for the Western District of Louisiana challenging the constitutionality of Act 358. They argued that the law is preempted under the Supremacy Clause of the U.S. Constitution, is unconstitutionally vague under the Due Process Clause, and violates the Constitution’s Contract Clause and the Takings Clause. The district court rejected all arguments and upheld the law, and the drug companies appealed.
The Fifth Circuit affirmed the district court’s ruling, stating: “States regulate pharmacies — and the distribution of drugs to those pharmacies — every day… Act 358 fits comfortably within that tradition.” The court held that the 340B “regulatory scheme is not ‘so pervasive that Congress left no room for state supplementation’” because § 340B regulates “neither the distribution of drugs to patients nor the role of pharmacies in this distribution.” By leaving these matters “unaddressed in an otherwise comprehensive and detailed federal regulatory scheme,” Congress “left [these matters] subject to the disposition provided by state law.”
The court held that the state and federal enforcement schemes do not conflict because the “two regimes operate in distinct spheres.” Section 340B governs pricing, while Act 358 governs distribution, and “there is no overlap in the enforcement Venn Diagram.”
The court rejected the manufacturer’s obstacle-preemption theory, which “rests on the premise that Act 358 regulates pricing on its face.” The court “reject[ed] that premise” because “Act 358 does not regulate prices; it regulates conduct.” Act 358 does not skew the balance of Congress’s objectives because “[f]ar from frustrating § 340B’s objectives, the two laws work in tandem to advance Congress’s central aim.”
The Powers team included Ron Connelly, Bill von Oehsen, Barbara Straub Williams, Hannah Hauer, Fernando Montoya, and Delaney Bounds Wilson.
To read the full decision, click here. To learn more about Powers Healthcare Litigation team, visit https://www.powerslaw.com/practicearea/litigation-healthcare/.