The unpublished opinion, written by U.S. Circuit Judge Richardson and joined by U.S. Circuit Judge Rushing, relied on the panel's March 31 decision in Pharmaceutical Research & Manufacturers of America v. McCuskey, which held that West Virginia's materially similar statute is likely preempted by the federal 340B program.
"In light of this Court's decision in PhRMA, we hold that the district court erred as a matter of law," Richardson wrote. The panel left it to the district court "to determine in the first instance, applying the principles set forth in PhRMA, the propriety of preliminary relief."
H.B. 1056 prohibits a "340B manufacturer" from "directly or indirectly . . . limit[ing]" the distribution of "a 340B drug to" a "pharmacy that is under contract with . . . a covered entity," unless required by federal law. The statute defines its terms by reference to 42 U.S.C. § 256b, the federal provision establishing the 340B program.
"H.B. 1056 imposes obligations on drug manufacturers solely by virtue of their participation in the federal 340B program and does not regulate manufacturers outside that program," the majority wrote.
The plaintiffs — including AbbVie, Allergan, Novartis Pharmaceuticals Corp., AstraZeneca Pharmaceuticals LP and the Pharmaceutical Research and Manufacturers of America — had sued Maryland Attorney General Anthony G. Brown and members of the Maryland Board of Pharmacy seeking to enjoin the law on preemption and other grounds. U.S. District Judge Matthew James Maddox denied the preliminary injunction below.
U.S. Circuit Judge DeAndrea Gist Benjamin dissented, writing that she would have affirmed the denial. She said that in McCuskey, the majority "departed from the unanimous view of the circuit courts and the overwhelming consensus view of the district courts" in finding preemption likely.
Benjamin wrote that Congress's "goal was simple: stretch scarce healthcare dollars and expand access to essential medications for vulnerable communities," quoting the Fifth Circuit's decision in AbbVie, Inc. v. Murrill. She counted "16 district courts that have rejected or dismissed a drug manufacturer's preemption arguments, compared to the two district courts that have found otherwise."
"Maryland did not overstep its bounds by enacting H.B. 1056," Benjamin wrote. "I would have affirmed the district court's denial of a preliminary injunction."
The appellants were represented by Matthew Scott Owen of Kirkland & Ellis LLP, Philip J. Perry of Latham & Watkins LLP and Jessica Lynn Ellsworth of Hogan Lovells US LLP. Ryan Robert Dietrich of the Maryland Attorney General's office argued for the state.
The American Hospital Association, Maryland Hospital Association, Mid-Atlantic Association of Community Health Centers, 340B Health and the American Society of Health-System Pharmacists filed as amici supporting the state.
The case is AbbVie, Inc. v. Brown, case numbers 24-1939, 24-1949 and 24-1978, in the U.S. Court of Appeals for the Fourth Circuit.