Fourth Circuit: State “340B Manufacturer” Anti-Restriction Statutes Must Be Reassessed Under Intervening Federal Preemption Precedent (Pharm. Rsch. & Mfrs. of Am. v. McCuskey)
I. Introduction
This consolidated appeal in Novartis Pharmaceuticals Corporation v. Anthony G. Brown (with multiple
manufacturer plaintiffs and the industry association) concerns Maryland’s 2024 enactment of H.B. 1056,
codified at Md. Code § 12-6C-09.1. The statute targets drug manufacturers that participate in the federal
340B drug pricing program and prohibits a “340B manufacturer” from “directly or indirectly” limiting
distribution of a “340B drug” to a contract pharmacy used by a “covered entity,” absent a federal requirement.
The plaintiffs (manufacturers and a trade association) sued Maryland officials (the Attorney General and members of the Maryland
Board of Pharmacy) seeking to enjoin enforcement, arguing—among other things—that H.B. 1056 is preempted by federal law.
The district court denied a preliminary injunction after concluding plaintiffs were unlikely to succeed on the merits.
While this appeal was pending, the Fourth Circuit decided a closely related case about a materially similar West Virginia statute:
Pharm. Rsch. & Mfrs. of Am. v. McCuskey (“PhRMA”), holding that law was likely preempted
and that the remaining preliminary-injunction factors supported relief.
II. Summary of the Opinion
The Fourth Circuit (Richardson, J., joined by Rushing, J.) vacated the district court’s order denying a preliminary
injunction and remanded. The panel did not itself re-weigh all preliminary-injunction factors or issue an injunction;
instead it held that, in light of the intervening Fourth Circuit decision in Pharm. Rsch. & Mfrs. of Am. v. McCuskey,
the district court’s legal assessment was erroneous and must be reconsidered under PhRMA.
Judge Benjamin dissented. She would have affirmed the denial of preliminary relief, reiterating the dissenting view she expressed in
McCuskey, emphasizing the 340B program’s purpose, the breadth of contrary authority in other circuits and district courts, and her
disagreement with the majority’s preemption approach (including its attention to Spending Clause framing).
III. Analysis
A. Precedents Cited
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Pharm. Rsch. & Mfrs. of Am. v. McCuskey (“PhRMA”).
This is the decisive authority driving the remand. The majority treats PhRMA as establishing controlling circuit guidance that
a materially similar “delivery” statute targeting 340B participants is likely preempted, and that the preliminary-injunction
balance favors enjoining enforcement. Because H.B. 1056 resembles the West Virginia law, the district court must re-evaluate the request
for preliminary relief “applying the principles set forth in PhRMA.”
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Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
The panel cites Winter for the governing preliminary-injunction framework (likelihood of success, irreparable harm, balance of equities,
public interest). It references PhRMA as having already applied these factors in a closely analogous context.
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United States v. Schooner Peggy, 5 U.S. (1 Cranch) 103, 110 (1801);
Thorpe v. Housing Auth. of Durham, 393 U.S. 268, 281-82 (1969).
These authorities support the appellate principle that courts generally apply controlling law as it exists at the time of decision.
Here, that meant the Fourth Circuit had to account for the intervening PhRMA decision, even though the district court ruled earlier.
The panel uses these cases to justify vacatur and remand because the legal landscape changed.
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Astra USA, Inc. v. Santa Clara Cnty., 563 U.S. 110, 113 (2011).
Cited for a foundational description of the 340B program and its “bargain” structure—manufacturers that participate provide discounts to
covered entities, and in return receive access tied to Medicaid (and, as noted in the opinion, Medicare Part B coverage conditions are also
implicated in the broader statutory ecosystem).
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AbbVie, Inc. v. Murrill, 166 F.4th 528 (5th Cir. 2026) (dissent citation).
The dissent cites Murrill to emphasize 340B’s purpose (“stretch scarce healthcare dollars and expand access”) and to situate the Fourth
Circuit’s approach against other appellate authority. The dissent frames the Fourth Circuit majority’s approach as out of step with an asserted
consensus in other circuits and many district courts.
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AbbVie, Inc. v. Fitch, 152 F.4th 635 (5th Cir. 2025);
Pharm. Rsch. & Mfrs. of Am. v. McClain, 95 F.4th 1136 (8th Cir. 2024) (dissent citation).
The dissent uses these cases to argue that other circuits have rejected manufacturer preemption challenges to comparable state measures,
underscoring a growing inter-circuit divide.
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District court decisions (dissent citation list)
The dissent catalogs numerous district court rulings denying preliminary injunctions or rejecting/dismissing preemption challenges to analogous
statutes, contrasting them with a smaller set of rulings that found likely preemption. This list is used to argue the Fourth Circuit’s trajectory
is unusual and to support the dissent’s view that Maryland’s law is a permissible state response.
B. Legal Reasoning
The majority opinion is procedurally focused and rests on a straightforward chain of reasoning grounded in intervening precedent:
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H.B. 1056 targets only 340B participants.
The panel emphasizes that Maryland’s obligations are triggered “solely by virtue of” participation in the federal 340B program, and that the
statute’s definitions expressly incorporate 42 U.S.C. § 256b.
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A materially similar statute has been deemed likely preempted in-circuit.
The court notes that West Virginia enacted a “materially similar” law and that the Fourth Circuit in PhRMA held it “is likely preempted.”
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Intervening controlling authority requires vacatur and remand.
By citing Schooner Peggy and Thorpe, the court signals that appellate review must reflect current controlling law. Since
PhRMA changed (or clarified) the governing preemption analysis for these 340B-targeted state laws within the circuit, the district court’s
earlier “unlikely to succeed” determination is deemed legally erroneous in light of that new guidance.
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The district court should apply PhRMA first.
Rather than issuing preliminary relief outright, the panel leaves it to the district court to evaluate “in the first instance” the propriety of a
preliminary injunction “applying the principles set forth in PhRMA.”
C. Impact
Although unpublished, the decision has meaningful practical and doctrinal implications within the Fourth Circuit:
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Immediate litigation effect in Maryland (and similar statutes):
The vacatur signals that, after PhRMA, plaintiffs challenging 340B-specific “anti-restriction” statutes in the Fourth Circuit will have a
stronger likelihood-of-success argument at the preliminary-injunction stage, at least where the state law is materially similar to West Virginia’s.
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Acceleration of an inter-circuit conflict:
The dissent frames a stark split between the Fourth Circuit’s PhRMA-driven path and decisions cited from the Fifth and Eighth Circuits.
That kind of split increases the chance of further appellate developments and potential Supreme Court review concerning the relationship between
§ 256b and state pharmacy-delivery/contract-pharmacy protections.
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Preemption framing becomes central:
The dissent’s focus on the Spending Clause dimension and the majority’s reliance on PhRMA indicate that the key battleground is not merely
policy (access and affordability) but the legal characterization of the 340B program’s structure and the extent to which federal law leaves room
for state regulation of distribution practices affecting covered entities and contract pharmacies.
IV. Complex Concepts Simplified
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The “340B program” (42 U.S.C. § 256b):
A federal program under which drug manufacturers that participate must sell certain outpatient drugs to specified safety-net providers (“covered entities”)
at discounted prices. The opinion describes it as a “spending-power bargain”: manufacturers “opt into” the program and, in exchange, gain access to
certain federal reimbursement/coverage pathways.
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Contract pharmacies:
Many covered entities do not operate their own pharmacies, so they contract with outside pharmacies to dispense 340B drugs. The contested state laws
address manufacturer policies that restrict distribution to (or through) these contract pharmacies.
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Federal preemption:
A doctrine rooted in the Supremacy Clause under which state law is invalid if it conflicts with federal law. Here, the manufacturers argue that
federal 340B law displaces state rules that impose additional obligations on 340B-participating manufacturers.
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Preliminary injunction (the Winter test):
A temporary court order preventing enforcement of a law while litigation proceeds. Courts consider likelihood of success on the merits, irreparable harm,
the balance of equities, and the public interest.
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Vacated and remanded:
The appellate court erased (“vacated”) the district court’s order and sent the case back (“remanded”) for reconsideration under the correct legal framework.
It is not a final ruling on the ultimate merits of the statute.
V. Conclusion
The Fourth Circuit’s decision does not finally decide whether Maryland’s H.B. 1056 is preempted; instead, it establishes a controlling procedural and
practical directive: after Pharm. Rsch. & Mfrs. of Am. v. McCuskey, district courts within the circuit must reassess
requests to enjoin materially similar 340B-targeted state statutes using PhRMA’s preemption principles and injunction-factor analysis.
The dissent underscores the broader national controversy—states framing these laws as protections for safety-net access, manufacturers framing them as
federally preempted add-ons to a federal spending-program bargain—setting the stage for continued litigation and likely further appellate clarification.