A U.S. District Court has dismissed three complaints filed by pharmaceutical manufacturers challenging a 2025 amendment to South Dakota law. The amendment restricts pharmaceutical manufacturers from controlling key contract terms related to how discounted drugs are delivered to healthcare providers serving underserved populations under the federal 340B Program.
“This decision upholds a law intended to ensure that discounted medications reach the individuals who need them most,” said Attorney General Jackley. “This ruling guarantees that our healthcare providers will continue to access these discounted medications and use them in ways that best serve their communities.”
AbbVie, AstraZeneca, and PhRMA had challenged the statute prohibiting pharmaceutical manufacturers and wholesale drug distributors from interfering in agreements between 340B entities and pharmacies. The federal 340B Program requires manufacturers to provide discounted drugs to eligible healthcare providers, especially those serving rural, Native American, and other underserved populations.
These healthcare providers had sought direct delivery of discounted drugs to designated pharmacies. Manufacturers opposed this practice, asserting it reduced their profits. The 2025 South Dakota law bars manufacturers from restricting delivery methods directed by these providers.
All three constitutional challenges filed by the manufacturers have now been dismissed by the U.S. Federal Court.
SD Attorney General’s Office