Intervening Circuit Preemption Precedent Requires Vacatur and Remand in 340B Contract-Pharmacy State-Law Challenges

1. Introduction

Pharmaceutical Research and Manufacturers of Ameri v. Anthony Brown is an unpublished Fourth Circuit decision arising from a multi-plaintiff challenge by drug manufacturers and an industry trade association to Maryland’s 2024 enactment of H.B. 1056, codified at Md. Code § 12-6C-09.1. The defendants were the Maryland Attorney General and officials of the Maryland Board of Pharmacy, sued in their official capacities.

The statute targets manufacturers participating in the federal 340B program by prohibiting a “340B manufacturer” from “directly or indirectly” limiting distribution of a “340B drug” to a contract pharmacy used by a “covered entity,” unless required by federal law or regulation. Maryland incorporated federal definitions by reference to 42 U.S.C. § 256b.

The plaintiffs sought to enjoin enforcement of H.B. 1056, arguing (among other theories) that it is preempted by federal law. The district court denied a preliminary injunction, holding 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 law.

2. Summary of the Opinion

The Fourth Circuit vacated the district court’s denial of a preliminary injunction and remanded. The panel did not itself decide whether Maryland’s law is preempted or whether an injunction should issue. Instead, it held that the district court’s order could not stand because an intervening Fourth Circuit decision—Pharm. Rsch. & Mfrs. of Am. v. McCuskey—had held a materially similar West Virginia statute “likely preempted” and had held the remaining preliminary-injunction factors supported relief. The panel instructed the district court to reconsider preliminary relief in the first instance “applying the principles set forth in PhRMA.”

3. Analysis

3.1. Precedents Cited

A. Pharm. Rsch. & Mfrs. of Am. v. McCuskey (“PhRMA”)

The decisive driver of the disposition was the Fourth Circuit’s own recent decision in Pharm. Rsch. & Mfrs. of Am. v. McCuskey, which addressed a “materially similar” 340B-targeted state statute, W. Va. Code § 60A-8-6a. In PhRMA, the court concluded that statute was likely preempted by the federal 340B framework and that the Winter factors supported preliminary relief.

In this Maryland appeal, the panel treated PhRMA as controlling intervening authority requiring the district court to revisit its earlier “unlikely to succeed” assessment and the overall injunction calculus under the circuit’s clarified approach.

B. United States v. Schooner Peggy and Thorpe v. Housing Auth. of Durham

The court cited United States v. Schooner Peggy and Thorpe v. Housing Auth. of Durham for the principle that appellate courts apply the law as it exists at the time of decision, including intervening legal developments that occur after the district court rules. These cases supply the doctrinal bridge for vacatur: even if the district court’s analysis was reasonable when made, it became legally infirm once PhRMA changed the governing landscape in the circuit.

C. Winter v. Nat. Res. Def. Council, Inc.

The panel referenced Winter v. Nat. Res. Def. Council, Inc. to anchor the governing preliminary-injunction framework. By noting that PhRMA found the “remaining injunction factors” satisfied, the court signaled that the district court on remand must reassess not only likelihood of success, but also irreparable harm, balance of equities, and public interest, in light of the circuit’s new preemption analysis.

D. Astra USA, Inc. v. Santa Clara Cnty.

In describing the nature of the 340B program, the court cited Astra USA, Inc. v. Santa Clara Cnty. for the proposition that 340B is a “spending-power bargain” and for the basic structure of the program: manufacturers that opt in provide discounts to covered entities and, in return, gain access to Medicaid payment for covered drugs.

E. Dissent’s authorities highlighting a national conflict

Judge Benjamin’s dissent emphasized that the majority’s approach in Pharm. Rsch. & Mfrs. of Am. v. McCuskey diverged from other appellate decisions and from a substantial body of district-court rulings. The dissent cited:

  • AbbVie, Inc. v. Murrill
  • AbbVie, Inc. v. Fitch
  • Pharm. Rsch. & Mfrs. of Am. v. McClain
  • Numerous district-court decisions (e.g., Pharm. Rsch. & Mfrs. of Am. v. Weiser; AstraZeneca Pharms. LP v. Lopez; Pharm. Rsch. & Mfrs. of Am. v. Frey; and others) reflecting widespread rejection of manufacturers’ preemption arguments.

Although not controlling within the Fourth Circuit, the dissent’s catalog underscores that these 340B state-law cases are producing an increasingly salient inter-jurisdictional conflict—raising the likelihood of further appellate clarification.

3.2. Legal Reasoning

The majority opinion is procedurally direct: it does not re-litigate Maryland’s statute on the merits, but instead treats PhRMA as an intervening decision that changed the governing legal framework. Under Schooner Peggy and Thorpe, that intervening authority required vacatur of the district court’s earlier preliminary-injunction denial.

The opinion also clarifies the nature of Maryland’s statute in a way that matters for preemption analysis (and for remand): H.B. 1056 imposes obligations on manufacturers solely “by virtue of their participation in the federal 340B program” and does not regulate manufacturers outside 340B. That feature aligns Maryland’s law with the West Virginia law addressed in PhRMA, supporting the panel’s conclusion that the district court must apply the same “principles.”

Finally, the court emphasized institutional role: it left it to the district court “to determine in the first instance” the “propriety of preliminary relief,” signaling that factual development and the equitable balancing under Winter remain for remand—albeit under a preemption framework newly shaped by PhRMA.

3.3. Impact

  • Within the Fourth Circuit, remand becomes the default posture for similar pending 340B contract-pharmacy statutes when a district court ruling predates PhRMA. Parties should anticipate renewed preliminary-injunction briefing focused on how closely the state law tracks the West Virginia statute and how PhRMA applies.
  • State legislative strategy is put under pressure where statutes expressly key obligations to 340B participation and incorporate federal definitions by reference. The opinion highlights that “340B-only” targeting is a legally consequential design choice.
  • The decision amplifies a developing split (as framed by the dissent) between the Fourth Circuit’s recent approach and other circuits and many district courts, raising the stakes for further appellate review and potential Supreme Court interest.
  • Practical litigation consequences: manufacturers gain a stronger procedural pathway to preliminary relief in the Fourth Circuit post-PhRMA, while states and covered-entity stakeholders (including amici such as hospital and community health organizations) face heightened risk that enforcement will be enjoined early in litigation.

4. Complex Concepts Simplified

  • 340B program (42 U.S.C. § 256b): A federal program in which participating drug manufacturers provide discounted drugs to certain safety-net providers (“covered entities”). Participation is tied to the federal spending-power structure described in Astra USA, Inc. v. Santa Clara Cnty..
  • Contract pharmacies: Many covered entities do not run their own pharmacies and contract with outside pharmacies to dispense 340B drugs. State “delivery” laws like Maryland’s H.B. 1056 aim to prevent manufacturers from restricting these arrangements.
  • Federal preemption: The constitutional doctrine (rooted in the Supremacy Clause) that invalidates state laws that conflict with federal law. Here, the dispute is whether the federal 340B framework leaves room for state laws that compel manufacturers to supply 340B drugs through contract pharmacies.
  • Preliminary injunction & the Winter test: A court order temporarily stopping enforcement of a law while the case proceeds. Under Winter v. Nat. Res. Def. Council, Inc., courts consider likelihood of success on the merits, irreparable harm, balance of equities, and public interest.
  • Vacated and remanded: The appellate court nullifies (“vacates”) the prior order and sends the case back (“remands”) for reconsideration under the correct legal framework—here, the framework articulated in Pharm. Rsch. & Mfrs. of Am. v. McCuskey.
  • Intervening law on appeal: Under United States v. Schooner Peggy and Thorpe v. Housing Auth. of Durham, appellate courts account for changes in controlling law that occur after the district court decision.

5. Conclusion

This unpublished Fourth Circuit decision is primarily a procedural implementation of an intervening circuit precedent. By vacating and remanding in light of Pharm. Rsch. & Mfrs. of Am. v. McCuskey, the court reinforced two core takeaways: (1) where controlling circuit law changes mid-appeal, district court rulings must be reconsidered under the new framework; and (2) state statutes that impose obligations specifically because a manufacturer participates in the 340B program will be evaluated through the lens established in PhRMA.

The dissent underscores the broader significance: the Fourth Circuit’s post-PhRMA trajectory sits amid substantial disagreement across courts, ensuring that 340B preemption litigation—especially over contract-pharmacy access—will remain a rapidly developing and high-stakes area of federal-state conflict.