Louisiana Act 358 and Federal 340B Drug Pricing Preemption

This legal opinion from the Fifth Circuit Court of Appeals addresses a consolidated challenge by pharmaceutical companies against Louisiana’s Act 358, which prohibits manufacturers from restricting the delivery of discounted drugs to contract pharmacies. The court explores the 340B Drug Pricing Program, a federal initiative designed to help vulnerable patients access affordable medication through safety-net healthcare providers. While drug makers argued that the state law was preempted by federal authority and violated constitutional protections like the Takings Clause and Contracts Clause, the court rejected these claims. The judges determined that the federal government’s silence on delivery logistics leaves states free to exercise their traditional police powers to regulate drug distribution. Consequently, the court affirmed the district court’s ruling, upholding Louisiana's right to prevent manufacturers from interfering with local pharmacy arrangements. This decision reinforces the ability of states to supplement federal healthcare programs to protect public health and consumer interests.