AbbVie Inc., a leading global biopharmaceutical company, has filed legal challenges in federal courts in both North Dakota and South Dakota, seeking to block the enforcement of newly passed drug pricing laws that the company asserts are unconstitutional and conflict with federal drug policy.
The lawsuits, filed in response to H.B. 1473 in North Dakota and S.B. 154 in South Dakota, challenge state laws requiring pharmaceutical manufacturers like AbbVie to transfer certain discounted products to specified commercial pharmacies under the federal 340B drug pricing program—or face criminal penalties.
AbbVie argues these laws unlawfully alter the structure of the federal 340B program by forcing manufacturers to provide discounted drugs beyond what is federally mandated. The company emphasizes that the 340B statute only requires an offer of discounted prices to eligible healthcare providers—not a forced sale to third-party commercial pharmacies like CVS or Walgreens.
“These laws impose unconstitutional burdens on manufacturers and unlawfully interfere with interstate commerce,” said AbbVie in a statement. “They go beyond the federal statute and undermine the structure Congress established for the 340B program.”
AbbVie’s complaints state that the laws violate the Fifth Amendment’s takings clause, impose additional state-law obligations not authorized under federal law, and unduly burden interstate commerce. The company also highlights that similar policies have already been the subject of legal disputes between drug manufacturers and the U.S. Department of Health and Human Services, with multiple federal appellate courts siding with manufacturers.
The new legislation, according to AbbVie, is part of a broader push by some states to impose expanded obligations on drugmakers after legal setbacks in federal courts. AbbVie asserts that both North Dakota and South Dakota’s laws are particularly aggressive attempts to reshape the 340B program without federal authority.
Created by Congress in 1992, the 340B program was intended to provide discounted medications to healthcare providers serving low-income or uninsured patients, in exchange for pharmaceutical companies’ participation in Medicaid and Medicare. AbbVie affirms its support for the program as designed but opposes what it views as unconstitutional expansions through state legislation.
The company is represented by legal teams from Kirkland & Ellis LLP, Crowley Fleck PLLP, and Gunderson Palmer Nelson & Ashmore LLP.
