AbbVie Denied Freeze on Tennessee Pharmacy Contract Law (1)

AbbVie Inc. and other drug makers lost a bid to block a Tennessee law regulating contracts between pharmaceutical companies and pharmacies.

AbbVie and the other plaintiffs aren’t entitled to a preliminary injunction based on claims that the regulation is preempted by federal law, said Judge Aleta A. Trauger of the US District Court for the Middle District of Tennessee. And the drugmakers’ claims that the state law is vague or unconstitutional similarly don’t hold up, Trauger said Monday.

AbbVie, a Chicago-based pharmaceutical giant and maker of the blockbuster autoimmune treatment Humira, alleged the state’s passing of SB 1414 in May—which requires the transfer of its federally required discounted pharmaceutical products to certain commercial pharmacies or risk criminal penalties—violates the drugmaker’s constitutional protections.

Under the federal 340B program, pharmaceutical companies must discount drugs for covered entities—including hospitals, clinics, and providers—that treat a disproportionate number of low-income and uninsured patients. States in recent years have aimed to curb the efforts of manufacturers trying to restrict deliveries of some drugs under the program.

Tennessee’s SB 1414 is one example of state efforts, here prohibiting manufacturers like AbbVie from limiting the number of contract pharmacies with which covered entities can enter agreements over the delivery of Section 340B drugs.

The US Department of Health and Human Services has no statutory authority to regulate the contract pharmacies, Trauger said. Contract pharmacies and covered entities developed a formula for both of them to share the profits from the Section 340B program, she said.

Under Tennessee’s law, pharmaceutical companies can’t impose additional requirements on covered entities or discriminate against them by imposing requirements they don’t impose on entities not covered by Section 340B, Trauger said.

AbbVie said that Tennessee’s law changes the terms of the Section 340B program and significantly increases the cost of participation. But AbbVie didn’t show that Congress intended to preempt the entire field of discounted drugs or that the statute contains any provisions that conflict with the Tennessee law, Trauger said.

AbbVie also failed to show a likelihood of success on the merits of its takings clause claim, because the pharmaceutical giant isn’t required to sell drugs in Tennessee, the judge said, adding that the regulations on delivery don’t amount to taking possession of AbbVie’s property or conveying it to a third party.

Tennessee’s law isn’t vague, Trauger said. AbbVie failed to show that people of ordinary intelligence wouldn’t understand what it prohibits or that it encourages arbitrary enforcement, Trauger said.

AbbVie’s dormant commerce clause challenge is additionally likely to fail because it didn’t show the law was adopted with protectionist intent or had a protectionist effect, Trauger said.

Finally, AbbVie’s First Amendment right to petition the government also isn’t likely violated, because Tennessee’s law doesn’t bar the company’s access to the federal alternative dispute resolution system relating to Section 340B claims, she said.

The plaintiffs also included Allergan Inc., Durata Therapeutics Inc., and Pharmacyclics LLC.

Quintairos Prieto Wood & Boyer PA and Kirkland & Ellis LLP represented AbbVie. The Tennessee Attorney General’s Office represented the state.

The case is AbbVie Inc. v. Skrmetti, 2025 BL 226536, M.D. Tenn., 3:25-cv-00519, 6/30/25.