On September 20, 2023, the U.S. Court of Appeals for the Eighth Circuit held oral arguments in Pharmaceutical Research and Manufacturers of America vs. Alan McClain, a 340B case brought by PhRMA to challenge an Arkansas law (Act 1103). The Arkansas law, Act 1103, or the 340B Drug Pricing Nondiscrimination Act, specifically prohibits drugmakers from refusing to distribute discounted drugs to contract pharmacies.

Ronald S. Connelly, principal for Powers Law, represented the Community Health Centers of Arkansas and Piggott Community Hospital during the Eighth Circuit argument.

“Congress has expressed no such clear and manifest purpose to disturb state laws governing contract pharmacies or intrastate drug distribution,” Connelly said to the court when asked about PhRMA’s challenge to the law.

The case centers around the use of contract pharmacies to distribute drugs discounted under Section 340B of the Public Health Service Act. This federal law mandates that pharmaceutical companies provide discounts on drugs to qualifying hospitals, clinics, and healthcare providers serving low-income and uninsured patients, collectively referred to as “covered entities.”

Contract pharmacies are employed to distribute these discounted drugs to the patients of covered entities at local pharmacies. Recently, some drug manufacturers have imposed restrictions or limitations on drug shipments to contract pharmacies.

Powers is a renowned Washington, DC-based law and government relations firm specializing in healthcare and regulatory matters, education, and the law of tribal nations. Powers’ 340B program practice has been at the forefront of defending and advancing the 340B program, advocating for the needs of safety net providers and their patients for several decades. Powers assists 340B covered entities and other 340B stakeholders – including Ryan White Clinics, Federally Qualified Health Centers, children’s hospitals, disproportionate share hospitals, rural hospitals, retail pharmacies and contract pharmacy administrators. William von Oehsen helped draft the original 340B legislation as well as significant amendments to the statute under the Affordable Care Act of 2010.


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