AstraZeneca sues Utah attorney general over new drug pricing law
AstraZeneca, a major pharmaceutical company, has sued Utah's Attorney General Derek Brown over a recently passed state law allowing for lower pricing in pharmacies.
The lawsuit concerns how SB69, passed during the 2025 state legislative session, deals with Section 340B of the federal Public Health Service Act. The suit was filed in May in the U.S. District Court of the District of Utah.
The lawsuit argues that SB69 violates federal law by expanding the 340B drug discount program to unlimited pharmacies.
The 340B drug discount program is designed to provide pricing benefits to specific eligible health care entities. It requires pharmaceutical manufacturers to offer products at steeply discounted rates for a specific list of entities.
'Because such price controls can disincentivize innovation and destabilize markets, Congress carefully crafted Section 340B and limited participation in the program to fifteen — and only fifteen — types of covered entities," per the lawsuit.
It also points out that for-profit pharmacy chains, such as CVS and Walgreens, were not included in the list of covered entities.
AstraZeneca's suit seeks for an order declaring that SB69 violates federal law and is unconstitutional. It also seeks to stop Brown and Utah Insurance Commissioner Jon Pike from enforcing SB69 against AstraZeneca in any manner.
The Utah Attorney General's Office said Friday it had no comment on the lawsuit.
SB69, which was sponsored by Sen. Evan Vickers, R-Cedar City, defines terms related to the 340B drug discount program and prohibits pharmaceutical manufacturers from setting certain restrictions.
Under the law, manufacturers cannot prohibit or restrict pharmacies from contracting with 340B entities. They also cannot deny these 340B entities access to specific drugs.
'Apparently dissatisfied with the scope of federal law, the State of Utah has enacted a statute seeking to achieve under state law precisely the same result that federal courts have resoundingly rejected,' per the suit. 'The state law requires pharmaceutical manufacturers to offer 340B-discounted pricing for sales at an unlimited number of contract pharmacies.'
The suit says that SB69 extends Section 340B price caps beyond the scope of the federal program, requiring manufacturers to make discounted drugs available for sale at any and all pharmacies 'authorized by a 340B entity to receive the drug.'
It alleges that the law extends the discounts to new categories of transactions that are not covered by the program, thus conflicting with federal law requirements.
The suit argues that the law conflicts with federal law, specifically court rulings that 'make clear that the federal 340B statute does not obligate manufacturers to deliver discounted drugs to unlimited contract pharmacies."
According to the suit, SB69 also violates federal patent law, which 'prohibits states from regulating the price of patented goods.'
'It requires manufacturers like AstraZeneca to offer steeply discounted prices for the sale of their patented drugs, thereby extending federal price caps to an additional category of patented drug sales (contract pharmacy sales) that federal courts have held fall outside of the 340B program.
It also argues that SB69 violates the Contracts Clause of the U.S. Constitution and the Constitution's takings clause.
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