Health Law Advisor

On September 12, 2025, the United States Court of Appeals for the Fifth Circuit, in AbbVie v. Fitch, Case No. 24-60375, (5th Cir. 2025), affirmed a federal District Court’s denial of a preliminary injunction sought by the pharmaceutical manufacturer AbbVie. AbbVie sought to enjoin enforcement of the state of Mississippi’s 2024 law, H.B. 728, which prohibits drug manufacturers from interfering with how a 340B covered entity distributes 340B drugs to eligible patients.

The 340B Program requires drug manufacturers to give discounts to certain categories of safety-net providers under the law – known as "covered entities" – in order to have their drugs covered by Medicaid. Covered entities commonly contract with third-party pharmacies – known as “contract pharmacies” – to dispense drugs to 340B-eligible patients. In recent years, citing concerns relating to the growth of the 340B program, compliance with 340B requirements, and transparency, AbbVie and other manufacturers have implemented restrictions that limit the number of contract pharmacies with which each covered entity can contract. Covered entities counter that these policies undermine the 340B program's intent to serve low-income and uninsured patients and cause hospitals to reduce patient services. AbbVie’s policy restricted covered entities to contracting with a single contract pharmacy within 40 miles of the covered entity.

By Alan J. Arville, Constance A. Wilkinson and Selena M. Brady

The House of Representatives Energy and Commerce Committee ("the Committee") circulated draft language to include in its 21^st Century Cures legislation earlier this week to reform the 340B drug discount program (the "340B Program"). Although the draft 340B language was pulled from the legislation yesterday, the language proposed provides insight into what future legislative reform may include. The draft language, if adopted, would have a substantial impact on all 340B Program stakeholders, including, covered ...