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ST. LOUIS (CN) — An Eighth Circuit panel on Wednesday denied Novartis Pharmaceuticals’ request to block a Missouri law requiring the drug giant to give medical providers unlimited access to discounted drugs for their pharmacies.
In a unanimous ruling, a three-judge panel found Novartis’ arguments that a federal court erred in denying a preliminary injunction because it was unlikely to succeed on the merits fell flat.
The law, Senate Bill 751, requires drugmakers to accept orders for providers eligible for discounts under the 340B program, a federal initiative designed to serve low-income and uninsured patients by offering more comprehensive medical services. The law allows these providers to have an unlimited number of contracts with pharmacies.
“Novartis contends that S.B. 751 violates the dormant commerce clause by regulating out-of-state transactions between Novartis and its wholesalers who, in turn, sell 340B drugs to covered entities in Missouri,” U.S. Circuit Judge Ralph R. Erickson, a Donald Trump appointee, wrote for the panel “This interpretation misreads the statute. S.B. 751 does not purport to regulate transactions between drug manufacturers and their wholesalers; rather, it regulates only the delivery of 340B drugs to contract pharmacies that have partnered with a Missouri covered entity.”
Novartis sued then-Attorney General Andrew Bailey and members of Missouri’s pharmaceutical board in 2024, shortly after the rules were signed into law, claiming they violate both the dormant commerce clause and the supremacy clause of the Constitution.
U.S. District Judge M. Douglas Harpool, a Barack Obama appointee, originally denied Novartis’ request for an injunction, prompting the appeal.
During a January hearing in front of the three-judge panel, Novartis attorney Jessica L. Ellsworth, of Washington-based Hogan Lovells US LLP, cited a 2025 Eighth Circuit decision in Association for Accessible Medicines v. Ellison. That case challenged a Minnesota law prohibiting manufacturers from imposing excessive price increases on generic or off-patent drugs. In that case, the Eighth Circuit found the law had the impermissible effect of controlling prices outside the state.
But the appeals court noted that decision was based on different circumstances than this challenge.
“While S.B. 751 may incidentally bear on out-of-state transactions, it does not have a specific impermissible extraterritorial effect and directly regulates only the delivery of 340B drugs to covered entities and their contract pharmacies,” Erickson wrote. “Because S.B. 751 is consistent with Missouri’s power to regulate conduct occurring within its borders, Novartis is not likely to prevail on the merits of its extraterritoriality challenge.”
The court was also unswayed by Novartis’ claim that the law violates the dormant commerce clause because it discriminates against interstate commerce.
“S.B. 751 does not facially discriminate against interstate commerce because it does not refer to in-state or out-of-state manufacturers or otherwise indicate a preference for in-state entities,” Erickson wrote.
“Once covered entities purchase 340B drugs at the ceiling price set by federal law, S.B. 751 prevents drug manufacturers from prohibiting covered entities from directing the delivery of those drugs to its contract pharmacies. Novartis fails to show how such a policy discriminates against out-of-state economic interests or affects the price of 340B drugs.”
Manufacturers must participate in the 340B Program and its price controls as a condition for having Medicare Part B and Medicaid pay for their therapies.
“This is a win for rural families who depend on this program to afford the medications they need,” Missouri Attorney General Catherine Hanaway said in a statement. “Our successful defense against deep-pocketed Big Pharma helps ensure rural Missourians keep access to affordable prescription drugs.”
Ellsworth did not immediately responded to a request for comment.
U.S. Circuit Judges Lavenski R. Smith and Duane Benton, both George W. Bush appointees, joined Erickson in the decision.
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