AbbVie Inc. et al v. Weiser et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 25-cv-1847-WJM-KAS
ABBVIE, INC., et al.,
Plaintiffs,
v.
PHILIP WEISER, et al.,
Defendants.
ORDER DENYING PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION
Plaintiffs AbbVie, Inc., Allergan, Inc., AbbVie Products LLC, Pharmacyclics LLC,
and Allergan Sales, LLC (collectively, “Plaintiffs” or “AbbVie”) bring this lawsuit against
Defendants Philip Weiser, in his official capacity as Attorney General of the State of
Colorado; and Kristen Wolf, Ryan Leyland, Patricia Evacko, Avani Soni, Michael
Scruggs, Alexandra Zuccarelli, and Jayant Patel, in their official capacities as members
of the Colorado State Board of Pharmacy (collectively, “Defendants”), to challenge the
constitutionality of Colorado Senate Bill 25-071, now codified as the Colorado 340B
Contract Pharmacy Protection Act, Colorado Revised Statutes (C.R.S.) §§ 6-29-101 et
seq. (2025) (the “Act”).1 (ECF No. 43.)
Currently before the Court is AbbVie’s Motion for a Preliminary Injunction
(“Motion”), by which it seeks to preliminarily enjoin enforcement of the Act. (ECF No. 7;
see also ECF No. 43 at 65 ¶ 4.) The Motion has been fully briefed (ECF Nos. 33, 36,
1 The Act went into effect on August 6, 2025. (See ECF No. 33-1 at 9.)
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52, 74),2 and the Court presided over an evidentiary hearing on the Motion on
September 19, 2025 (ECF No. 93). Thus, it is now ripe for adjudication.
For the reasons set forth below, the Motion is denied.
I. 	BACKGROUND3
A. 	Section 340B
In 1992, Congress enacted § 340B of the Public Health Service Act, 42 U.S.C.
§ 256b (“Section 340B”)—thereby creating the “340B Program”—“to ensure that
uninsured and low-income individuals can access the medications they need and to
ensure that medical providers serving those individuals receive crucial subsidies.”
AbbVie, Inc. v. Fitch, 152 F.4th 635, 639 (5th Cir. 2025). The 340B Program
accomplishes this by “impos[ing] ceilings on prices drug manufacturers may charge for
medications sold to specified health-care facilities.” Astra USA, Inc. v. Santa Clara
County, Cal., 563 U.S. 110, 113 (2011). Those facilities, called “covered entities,”
“include public hospitals and community health centers, many of them providers of
safety-net services to the poor.” Id.; see also § 256b(a)(4) (defining “covered entity”).
2 With the Court’s leave, Amici Curiae American Hospital Association, 340B Health,
Colorado Hospital Association, and American Society of Health-System Pharmacists
(collectively, the “Amici”) also filed a brief in opposition to the Motion. (ECF No. 34-1.)
3 Numerous federal courts have now had occasion to summarize the history of the 340B
Program and related HHS guidance relevant to this lawsuit, including the Supreme Court and
four Circuit Courts of Appeal. See Astra USA, Inc. v. Santa Clara County, Cal., 563 U.S. 110
(2011); AbbVie, Inc. v. Fitch, 152 F.4th 635 (5th Cir. 2025); PhRMA v. McClain, 95 F.4th 1136
(8th Cir. 2024); Novartis Pharms. Corp. v. Johnson, 102 F.4th 452 (D.C. Cir. 2024); Sanofi
Aventis U.S. LLC v. U.S. Dep’t of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). The Court
leverages the factual background set forth in those decisions where applicable and adds further
detail from the parties’ briefing on the Motion where needed. All citations to docketed materials
are to the page number in the CM/ECF header, which sometimes differs from a document’s
internal pagination.
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The 340B Program helps covered entities care for their low-income and rural patients in
two ways: “First, it gives them extra revenue from serving insured patients: they turn a
profit when insurance companies reimburse them at full price for drugs that they bought
at the 340B discount. Second, it enables them to give uninsured patients drugs at little
or no cost.” Sanofi Aventis U.S. LLC v. U.S. Dep’t of Health & Hum. Servs., 58 F.4th
696, 699 (3d Cir. 2023).
The 340B Program “is superintended by the Health Resources and Services
Administration (‘HRSA’), a unit of the Department of Health and Human Services
(‘HHS’).” Astra, 563 U.S. at 113. “Drug manufacturers opt into the 340B Program by
signing a form Pharmaceutical Pricing Agreement (‘PPA’) used nationwide.” Id. “PPAs
are not transactional, bargained-for contracts.” Id. Rather, “[t]hey are uniform
agreements that recite the responsibilities § 340B imposes, respectively, on drug
manufacturers and the Secretary of HHS.” Id. Specifically, the PPA obligates
manufacturers to “offer each covered entity covered outpatient drugs for purchase at or
below the applicable ceiling price if such drug is made available to any other purchaser
at any price.” § 256b(a)(1). Manufacturers’ eligibility to participate in Medicaid and
Medicare Part B “is conditioned on their entry into PPAs for covered drugs purchased
by [covered] entities.” Astra, 563 U.S. at 113.
Section 340B also prohibits covered entities from engaging in certain conduct:
First, it bars ‘duplicate discounts or rebates,’ forbidding
covered entities from seeking both the 340B discount and a
Medicaid rebate on the same drug. [42 U.S.C.]
§ 256b(a)(5)(A). Second, it bars ‘diversion,’ providing that a
covered entity ‘shall not resell or otherwise transfer’ a
discounted drug ‘to a person who is not a patient of the
entity.’ Id. § 256b(a)(5)(B). Third, it requires covered
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entities to permit [HHS] and drug manufacturers to ‘audit’
their records to assess compliance with the duplicate-
discount and diversion bans. Id. § 256b(a)(5)(C). And
fourth, it provides that a covered entity that violates the
duplicate-discount or diversion bans ‘shall be liable’ to the
drug manufacturer for the amount improperly received. Id.
§ 256b(a)(5)(D).
Fitch, 152 F.4th at 640.
B. 	Role of Contract Pharmacies
“When Congress first enacted Section 340B, few covered entities had
pharmacies in house,” Sanofi Aventis, 58 F.4th at 700, in substantial part because, for
many, “building or maintaining [an in-house] pharmacy is cost-prohibitive,” PhRMA v.
McClain, 95 F.4th 1136, 1139 (8th Cir. 2024). Thus, “[s]ince the beginning, covered
entities have contracted with outside pharmacies,” or “contract pharmacies,” “for the
distribution and dispensation of 340B drugs.” Id. For covered entities with large, rural
service areas, “the outsourcing of pharmacy services [also] allowed for drug
dispensation closer to where [their] low-income patients reside.” McClain, 95 F.4th at
1139. “Covered entities using contract pharmacies would still order and pay for the
drugs, but they would be shipped directly to the pharmacies.” Sanofi Aventis, 58 F.4th
at 700.
Noting covered entities’ reliance on contract pharmacies and Section 340B’s
“silen[ce] as to permissible drug distribution systems” to patients, 61 Fed. Reg. 43, 549,
43,549 (Aug. 23, 1996), HRSA issued guidance in 1996 “permitting covered entities
lacking an in-house dispensing pharmacy to contract with a single third-party
commercial pharmacy to receive and dispense 340B drugs to their patients, so long as
they abided by Section 340B’s requirements and its duplicate-discount and diversion
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bans,” Fitch, 152 F.4th at 640 (citing id. at 43,550–55). Then, in 2010, HRSA “changed
course” and “issu[ed] new guidance permitting all covered entities—even those with an
in-house dispensing pharmacy—to contract with an unlimited number of outside
pharmacies to distribute Section 340B drugs to their patients.” Fitch, 152 F.4th at 640;
75 Fed. Reg. 10,272, 10,273 (Mar. 5, 2010).
After the 2010 guidance, the use of contract pharmacies proliferated, and
pharmaceutical manufacturers became increasingly concerned that “contract
pharmacies were driving up duplicate discounting and diversion.” Sanofi Aventis, 58
F.4th at 700; see also Novartis Pharms. Corp. v. Johnson, 102 F.4th 452, 457 (D.C. Cir.
2024) (citing governmental report indicating that “the number of contract pharmacies
participating in the program increased from about 1,300 to 23,000” between 2010 and
2019). So, manufacturers began adopting policies “that limited or prohibited covered
entities from contracting with outside pharmacies for the dispensation of 340B drugs to
patients.” McClain, 95 F.4th at 1139.
AbbVie adopted one such policy, its “340B Program Integrity Initiative,” in 2023.
(ECF No. 7-1 at 3 ¶ 4.) Under the current iteration of AbbVie’s policy, last updated in
February 2025, “hospital covered entities” “without an in-house outpatient pharmacy
may designate a single contract location” “within 40 miles of the HRSA registered
covered entity parent site” to receive “orders of 340B priced medicines,” provided that
the covered entity also “submits limited claims data on 340B utilization” for that contract
pharmacy location. (Id. at 51–52 (emphasis in original).) See also Fitch, 152 F.4th at
641 (noting “AbbVie’s contract-pharmacy policy . . . essentially follows HRSA’s 1996
guidance”).
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“HHS acted quickly to prohibit drug manufacturers from imposing these restrictive
contract-pharmacy policies.” Id. In December 2020, HHS issued an advisory opinion
concluding that, “to the extent contract pharmacies are acting as agents of a covered
entity, a drug manufacturer in the 340B Program is obligated to deliver its covered
outpatient drugs to those contract pharmacies and to charge the covered entity no more
than the ceiling price for those drugs.” OIG Advisory Op. No. 20-06, 2020 WL
11422965, at *1 (Dec. 30, 2020).
Manufacturers sued. Ultimately, the Third and D.C. Circuits upheld the
manufacturers’ policies because “Congress never said that drug makers must deliver
discounted 340B drugs to an unlimited number of contract pharmacies.” Sanofi Aventis,
58 F.4th at 707; Novartis Pharms., 102 F.4th at 455 (agreeing that “section 340B does
not prohibit manufacturers from limiting the distribution of discounted drugs by
contract”).4 HHS withdrew the advisory opinion. Fitch, 152 F.4th at 641.
C. 	State Legislatures Weigh In
Following the Third and D.C. Circuits decisions, “several states passed laws to
protect covered entities’ partnerships with contract pharmacies, attempting to do by
statute what HHS had done in its advisory opinion.” Id.
As pertinent here, the Act was signed into Colorado law on May 30, 2025. (ECF
No. 33-1 at 10.) Its operative provision prohibits manufacturers from undertaking the
following acts:
(a) 	Unless the receipt of the 340B drugs is prohibited by
the federal department of health and human services, a
4 A third appeal is currently pending before the Seventh Circuit. See Eli Lilly & Co. v.
HHS, et al., No. 21-3405 (7th Cir.).
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manufacturer, third-party logistics provider, or repackager, or
an agent, contractor, or affiliate of a manufacturer, third-party
logistics provider, or repackager, including an entity that
collects or processes health information, shall not, directly or
indirectly, deny, restrict, prohibit, discriminate against, or
otherwise limit the acquisition of a 340B drug by, or delivery
of a 340B drug to, a 340B covered entity, a pharmacy
contracted with a 340B covered entity, or a location
otherwise authorized by a 340B covered entity to receive
and dispense 340B drugs.
(b) 	A manufacturer shall not directly or indirectly require,
including as a condition, a 340B covered entity, a pharmacy
contracted with a 340B covered entity, or any other location
authorized to receive 340B drugs by a 340B covered entity
to submit any health information, claims or utilization data,
purchasing data, payment data, or other data that does not
relate to a claim submitted to a federal health care program,
unless such data is voluntarily furnished by such covered
entity or otherwise required to be furnished under applicable
federal law.
§ 6-29-105(1). A violation of the Act is an unfair or deceptive trade practice under the
Colorado Consumer Protection Act (“CCPA”), and the violator is subject to CCPA
enforcement provisions and penalties, including monetary fines of up to $20,000 per
violation. § 6-29-105(3)(a).
Pharmaceutical manufacturers have filed many lawsuits challenging state laws
comparable to the Act. Unlike their earlier challenges to the 2020 HHS guidance, the
very large majority of these lawsuits have been unsuccessful to date.5
5 See AbbVie Inc. v. Neronha, 1:25-cv-00388-JJM-AEM (D.R.I. Sept. 30, 2025) (denying
preliminary injunction as to Rhode Island law); AbbVie, Inc. v. Frey, 2025 WL 2813787, at *1 (D.
Me. Sept. 23, 2024) (same as to Maine law); AstraZeneca Pharms. LP v. Fitch, 766 F. Supp. 3d
657, 664–65 (W.D. Miss. 2024) (same as to Mississippi law); Novartis Pharms. Corp. v. Fitch,
738 F. Supp. 3d 737, 749–50 (S.D. Miss. 2024) (same); AbbVie Inc. v. Skrmetti, 2025 WL
1805271, at *18 (M.D. Tenn. June 30, 2025) (same as to Tennessee law); AstraZeneca
Pharms. LP v. Bailey, 2025 WL 644285, at *3 (W.D. Mo. Feb. 27, 2025) (granting motion to
dismiss manufacturer’s claims that Missouri law was preempted and violated the Takings
Clause); PhRMA v. Murrill, 2024 WL 4361597, at *8–9 (W.D. La. Sept. 30, 2024) (granting
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D. 	Procedural History
AbbVie filed this lawsuit challenging the constitutionality of the Act on June 12,
2025 (ECF No. 1) and moved for a preliminary injunction one day later (ECF No. 7).
After setting oral argument on the Motion, AbbVie requested an evidentiary hearing so
that it could proffer the testimony of three witnesses in support of its requested relief.
(ECF No. 31.) The Court set an evidentiary hearing at AbbVie’s behest. (ECF No. 32.)
During the September 19, 2025 hearing, the Court heard the testimony of five
witnesses in total. First, AbbVie called expert witness Alice Chen, Ph.D., a professor of
public policy at the University of Southern California, to generally “testify about . . . how
the [340B] program operates in practice” and “explain the growth of contract
pharmacies.” (ECF No. 111 at 19:11–20; see also ECF No. 36-2.) Second, AbbVie
called Mr. Edward Scheidler, its corporate representative, to “explain that, in fact,
AbbVie will not sell its drugs at the 340B price unless [its] conditions are agreed to,
which [AbbVie avers] is a complete answer to the State’s position on takings.” (ECF
No. 111 at 20:1–6.) And lastly, AbbVie called expert witness Dr. Amitabh Chandra, a
professor of public policy at Harvard University, to “explain where the research shows
summary judgment in favor of State on manufacturers’ claims that Louisiana law was
preempted and violated the Takings Clause); AbbVie Inc. v. Fitch, 2024 WL 3503965, at *12
(S.D. Miss. July 22, 2024) (denying preliminary injunction as to Mississippi law), aff’d 152 F.4th
635 (5th Cir. 2025); PhRMA v. Fitch, 2024 WL 3277365, at *11 (S.D. Miss. July 1, 2024)
(same); PhRMA v. McClain, 645 F. Supp. 3d 890 (E.D. Ark. 2022) (granting summary judgment
in favor of Arkansas official on manufacturers’ claim that Arkansas law was preempted), aff’d 95
F.4th 1136 (8th Cir. 2024), cert. denied 145 S.Ct. 768 (2024); but see AstraZeneca Pharms. LP
v. Harris, No. 4:24-cv-00268-KGB (E.D. Ark. Sept. 30, 2025), ECF No. 141 (denying judgment
on the pleadings as to manufacturer’s claim that Arkansas law violated Takings Clause);
PhRMA v. Morrisey, 760 F. Supp. 3d 439, 452–60 (S.D.W. Va. 2024) (granting preliminary
injunction as to West Virginia law and denying the defendants’ motion to dismiss).
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that 340B profits go,” which, according to AbbVie, “is not to charity care, to
uncompensated care, or to benefit patients.” (Id. at 20:7–11; see also ECF No. 36-1.)
Defendants, for their part, proffered testimony from “two witness who work for
Colorado hospital systems that are 340B covered entities,” both of whom were called to
generally testify “about how their systems have been impacted by the drug company
restrictions and how they expect it to change under the new law.” (ECF No. 111 at
23:13–14.) Those witnesses included Dr. Kevin Forbush, “a pharmacist who runs the
340B program at Intermountain Health,” and Kevin Stansbury, the CEO of Lincoln
Health, “a county governmental hospital system” located in the rural town of Hugo,
Colorado. (Id. at 23–25.)
The Court refers to some of that hearing evidence where relevant to its analysis
below. But ultimately, it finds it unnecessary to recount much of the testimony put forth
at the evidentiary hearing. In general, the Court concurs with Defendants’ view that the
testimony presented a compelling case that Section 340B is in dire need of legislative
reform, but it did not significantly move the needle on the issues immediately before the
Court—namely, whether AbbVie is substantially likely to succeed in demonstrating that
the Act is preempted by federal law or effects an unconstitutional taking.
II. 	LEGAL STANDARD
“Because a preliminary injunction is an ‘extraordinary remedy never awarded as
of right,’. . . the movant must make a ‘clear and unequivocal’ showing it is entitled to
such relief.” Colorado v. U.S. Envtl. Protection Agency, 989 F.3d 874, 883 (10th Cir.
2021) (quoting Winter v. Natural Res. Def. Council, 555 U.S. 7, 24 (2008)); Port City
Props. v. Union Pac. R.R. Co., 518 F.3d 1186, 1190 (10th Cir. 2008) (internal citation
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omitted)). “To obtain a preliminary injunction, the movant must show (1) it ‘is
substantially likely to succeed on the merits,’ (2) it ‘will suffer irreparable injury if the
injunction is denied,’ (3) its ‘threatened injury outweighs the injury the opposing party
will suffer under the injunction,’ and (4) ‘the injunction would not be adverse to the public
interest.’” Colorado, 989 F.3d at 883 (quoting New Mexico Dep’t of Game & Fish v.
U.S. Dep’t of Interior, 854 F.3d 1236, 1246 (10th Cir. 2017)). The third and fourth
factors merge when the government is the opposing party. Denver Homeless Out Loud
v. Denver, Colorado, 32 F.4th 1259, 1278 (10th Cir. 2022) (citation omitted).
III. 	ANALYSIS
AbbVie contends that the Act is unconstitutional because (1) it is preempted by
federal law pursuant to the Supremacy Clause and/or (2) it effects a taking in violation
of the Takings Clause. (See generally ECF Nos. 7, 43.) For the reasons explained
below, the Court finds that AbbVie has not established a substantial likelihood of
success on the merits of either claim. Accordingly, the Court does not proceed to
consider the remaining preliminary injunction factors. See Vill. of Logan v. U.S. Dep’t of
Interior, 577 F. App’x 760, 766 (10th Cir. 2014) (a “plaintiff’s failure to prove any one of
the four preliminary injunction factors renders its request for preliminary injunctive relief
unwarranted”); Dominion Video Satellite, Inc. v. Echostar Satellite Corp., 356 F.3d 1256,
1266 n. 8 (10th Cir. 2004) (concluding “the other preliminary injunction factors” “need
not [be] address[ed]” after finding against the movant on one factor).
A. 	Preemption
“Congress has the power to preempt state law” pursuant to the Supremacy
Clause, which “provides a clear rule that federal law ‘shall be the supreme Law of the
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Land . . . any Thing in the Constitution or Laws of any state to the Contrary
notwithstanding.’” Arizona v. United States, 567 U.S. 387, 399 (2012) (quoting U.S.
Const., Art. VI, cl. 2.) “[A]ny preemption inquiry begins with the presumption that federal
law does not override ‘the historic police powers of the States,’ without the ’clear and
manifest’ intent of Congress.” Bradshaw v. Am. Airlines, Inc., 123 F.4th 1168, 1173
(10th Cir. 2024) (quoting Arizona, 567 U.S. at 400). Thus, congressional intent is “the
ultimate touchstone in every pre-emption case.” Wyeth v. Levine, 555 U.S. 555, 565
(2009) (citation omitted).
“The party claiming preemption . . . bears the burden of showing with specificity
that Congress intended to preempt state law.” Day v. SkyWest Airlines, 45 F.4th 1181,
1184 (10th Cir. 2022) (internal citation and quotation marks omitted). “Congress’s intent
to preempt state law can be shown ‘through a statute’s express language’ or implied
‘through its structure and purpose.’” Bradshaw, 123 F.4th at 1173 (quoting Altria Grp.,
Inc. v. Good, 555 U.S. 70, 76 (2008)). Here, AbbVie does not argue that Section 340B
expressly preempts the Act. (See generally ECF No. 7.) Instead, it contends that the
Act is impliedly “preempted because it intrudes on a federal field and conflicts with the
text and purpose of the 340B statute.” (Id. at 7.)
Notably, categories of preemption are not “rigidly distinct.” English v. Gen. Elec.
Co., 496 U.S. 72, 79 n.5 (1990). “Indeed, field pre-emption may be understood as a
species of conflict pre-emption: A state law that falls within a pre-empted field conflicts
with Congress’ intent . . . to exclude state regulation.” Id. That sentiment rings true
here, where it is, at times, difficult to distinguish between AbbVie’s arguments in support
of its field preemption and conflict preemption theories. Nevertheless, the Court
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endeavors to disentangle those arguments and address AbbVie’s field and conflict
preemption theories separately below.
1. 	Field Preemption
Field preemption “exists where ‘a framework of regulation’ of a field is ‘so
pervasive’ that it leaves no space for state supplementation or where the federal interest
is ‘so dominant’ that the existence of a federal scheme can ‘be assumed to preclude
enforcement of state laws on the same subject.’” Bradshaw, 123 F.4th at 1173 (quoting
Arizona, 567 U.S. at 399). AbbVie has not demonstrated that it is substantially likely to
succeed in demonstrating that either inference applies here.
At the outset, AbbVie argues that Congress intended to preempt the field
because, through Section 340B, it created “a single comprehensive federal scheme that
governs every detail” of “the federally occupied 340B field,” “from covered-entity
eligibility to manufacturer obligations and enforcement . . . .” (ECF No. 7 at 7–8
(emphasis added).) Though AbbVie’s briefing does not specifically define the “340B
field,” AbbVie’s counsel seemed to affirm at the evidentiary hearing that it views the
relevant regulatory field quite broadly: “the field of the 340B program, itself.” (ECF No.
111 at 290:1–4.)
But it cannot be that Congress has enacted a scheme that governs “every detail”
of the 340B Program. Four federal Circuit Courts of Appeal now concur that Section
340B “is silent about delivery,” Sanofi Aventis, 58 F.4th at 703; Novartis Pharms., 102
F.4th at 461 (“agree[ing] entirely”); McClain, 95 F.4th at 1143 (relying on Sanofi
Aventis), and thus “regulates neither the distribution of drugs to patients nor the role of
pharmacies in this distribution,” Fitch, 152 F.4th at 646. The Court is further inclined to
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think that the manner of distribution of 340B drugs to patients is a relevant “detail” of the
340B Program of which Congress is well-aware, given that (1) “[p]harmacies have
always been an essential part of the 340B Program” and (2) Congress did “directly
address distribution by third-party wholesalers.” McClain, 95 F.4th at 1143 (citing 42
U.S.C. § 256b(a)(8)); see also Fitch, 152 F.4th at 646 (“Congress ‘knew how to impose
delivery-related requirements’ and regulate distribution, because Section 340B does
authorize distribution of drugs by manufacturers and third-party wholesalers.” (quoting
Sanofi Aventis, 58 F.4th at 704)). That “Congress chose not regulate distribution to
patients . . . indicat[es] that it did not intend to occupy the entire field in this area.” Fitch,
152 F.4th at 646.
Second, AbbVie suggests that there is necessarily a field preemption issue
because the Act “could not exist but for the federal 340B statute.” (ECF No. 7 at 8
(emphasis in original); see also ECF No. 111 at 290:1–4 (arguing that the Act facially
“targets the regulation of a federal program, and that intrudes on a federal field”).) The
Court presumes that AbbVie endeavors to show through this argument that there is a
“federal interest . . . ‘so dominant’ that the existence of a federal scheme can ‘be
assumed to preclude enforcement of state laws on the same subject.” Bradshaw, 123
F.4th at 1173 (quoting Arizona, 567 U.S. at 399).
AbbVie failed to direct the Court to any authority related to this argument in its
Motion. (See id.) However, in its reply, AbbVie cited two authorities for the somewhat-
related proposition that “there is no presumption against preemption where a state law
explicitly depends on a federal statute”: Buckman Co. v. Plaintiffs’ Legal Comm., 531
U.S. 341 (2001) and Boyle v. United Techs. Corp., 487 U.S. 500 (1988). (ECF No. 36
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at 4–5.) Moreover, at the evidentiary hearing, AbbVie’s counsel likened the Act to an
impermissible state “regulation of a federal instrumentality, like in McCulloch v.
Maryland.” (ECF No. 111 at 289:10–15.)
Buckman and Boyle may be a closer fit for AbbVie’s argument that the Act is in
tension with Section 340B’s enforcement scheme, but those authorities do not support
the broad contention that there is necessarily a field preemption issue where “a state
law explicitly depends on a federal statute.” (ECF No. 36 at 4.) Rather, the Supreme
Court held in those cases that state-law causes of action were impliedly preempted by
federal common law because there was a “uniquely federal interest” at stake, like “the
civil liabilities arising out of the performance of federal procurement contracts,” Boyle,
487 U.S. at 506 (government contractors immune from liability under state tort law), or
“the relationship between a federal agency and the entity it regulates,” Buckman, 531
U.S. at 347 (state tort law fraud-on-the-FDA claims impliedly preempted). AbbVie has
not identified a “uniquely federal interest” here.
This case is also unlike McCulloch v. Maryland, where the direct subject of state
regulation was itself a federal instrumentality. 17 U.S. 316 (1819). Here, it is the non-
governmental participants and beneficiaries of the 340B Program—namely,
pharmaceutical manufacturers and covered entities—that are the subject of state
regulation. And “the Supreme Court . . . has never adopted a categorical rule that
requires a finding of preemption whenever a state law is directly addressed to those
participating in a federal program where the federal statute does not rely on the state to
implement the program.” AbbVie Inc. v. Frey, 2025 WL 2813787, at *10 (D. Me. Sept.
23, 2025). To the contrary, “matters left unaddressed in [] a [federal] scheme are
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presumably left subject to the disposition provided by state law.” O’Melveny & Myers v.
F.D.I.C., 512 U.S. 79, 85 (1994).
The fundamental problem with AbbVie’s argument that the Act is preempted
because it depends on a federal statute is that it is backwards. As the Court
understands it, AbbVie essentially argues that “the existence of a federal scheme”
necessarily establishes there is a sufficiently dominant “federal interest” from which it
can be assumed that Congress intended to “preclude enforcement of state laws on the
same subject.” Bradshaw, 123 F.4th at 1173 (citation omitted). But that is not the law,
and AbbVie cannot circumvent its burden to identify a compelling federal interest
warranting preemption by pointing to the mere existence of a federal statute.
Lastly, AbbVie argues that the Act “goes to the very heart of the federally
occupied field: [i]t overrides the offer structure Congress established, eliminates
manufacturers’ federally permitted discretion, and dictates the terms under which
entities receive discounted drugs.” (ECF No. 7 at 8.) To the extent AbbVie is arguing
that the relevant field is defined more narrowly—“the terms by which manufacturers
must offer discounted drugs under the 340B program”—"there would still be no field
preemption.” Frey, 2025 WL 2813787, at *8. “[B]ecause 340B does not dictate many of
the terms regarding manufacturers’ obligation to offer and provide the drugs, the
language of 340B is insufficient to imply a congressional intent to preclude all state
regulation in the field.” Id. (citing Sanofi Aventis, 58 F.4th at 704 (observing, as to the
terms of an offer, that the 340B statute “imposes only a price term for drug sales to
covered entities, leaving all other terms blank”)).) Congress’s intent to preempt the field
cannot be inferred solely from the fact that it left certain “terms” to manufacturers’
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discretion. AbbVie’s discretion to set those terms—namely, where it is willing to deliver
340B drugs—is derived from Congress’s silence. See Novartis Pharms., 102 F.4th at
460 (“Section 340B is . . . silent about delivery conditions.”) And “Congressional silence
will not be presumed to mandate preemption.” Paul v. Monts, 906 F.3d 1468, 1475 n.8
(10th Cir. 1990) (internal citation and quotation marks omitted).
The counter inference to AbbVie’s arguments is that the Act does not intrude on
a federal field but instead implicates “traditional general areas of state regulation,” like
“public health,” Fitch, 152 F.4th at 647 (citing Gobeille v. Lib. Mut. Ins. Co., 577 U.S.
312, 325 (2016) (noting “the State’s traditional power to regulate in the area of public
health”)), and “the practice of pharmacy,” McClain, 95 F.4th at 1143 (citation omitted).
The “assumption that the historic police powers of the States [are] not to be superseded
by the Federal Act unless that was the clear and manifest purpose of Congress,” Altria
Grp., 555 U.S. at 77 (citation omitted), “applies with greater force when the alleged
conflict is in an area traditionally occupied by the States,” Ramsey Winch Inc. v. Henry,
555 F.3d 1199, 1204 (10th Cir. 2009). At this stage, AbbVie has failed to adduce
sufficient evidence to persuade the Court that it is substantially likely to succeed in
demonstrating that (1) this presumption against preemption does not extend to the Act
in the first instance and/or (2) that the presumption is overcome by “a strong showing
that Congress intended preemption.” Fitch, 152 F.4th at 1144.
2. 	Conflict Preemption
A state law provision will “also preempted if it conflicts with federal law, either
because (1) ‘compliance with both federal and state regulations is a physical
impossibility,’” “or because the provision (2) ‘stands as an obstacle to the
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accomplishment and execution of the full purposes and objectives of’ federal law.”
United States v. Supreme Court of New Mexico, 839 F.3d 888, 918 (10th Cir. 2016)
(quoting Arizona, 567 U.S. at 399).
Here, AbbVie argues that the Act “stands as an obstacle” to Congress’s
objectives for three reasons. (ECF No. 7 at 8–9; ECF No. 52 at 4.) Whether these
alleged conflicts are “a sufficient obstacle” to warrant a finding of conflict preemption “is
a matter of judgment, to be informed by examining the federal statute as a whole and
identifying its purpose and intended effects.” Crosby v. Nat’l Foreign Trade Council,
530 U.S. 363, 373 (2000).
a. 	Enforcement
AbbVie first contends that the Act “stands as an obstacle” to Congress’s
objectives because it “contravenes HRSA’s exclusive enforcement authority.” (ECF
No. 7 at 8.) On this record, the Court is unpersuaded.
AbbVie asserts that “[f]ederal law vests enforcement solely in HHS and lays out
the precise tools available: audits, dispute resolution, and civil penalties.” (Id. at 9
(citing §§ 256b(d)(l)(B)(v), (vi), (d)(3)).) By contrast, it notes that “[s]tate enforcement
mechanisms” under the Act include “civil suits by third parties, the Attorney General, or
the Board of Pharmacy.” (Id.) AbbVie thus contends that the federal and state
enforcement frameworks are in direct conflict insofar as the Act vests enforcement
authority in actors other than HRSA.
Following the Supreme Court’s decision in Astra, there can be little debate that
Section 340B decidedly does not authorize a private right of action for violations of the
federal statute. Indeed, the parties conceded in that case that covered entities had “no
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[private] right to sue for overcharges under [§ 340B] itself,” and the Supreme Court
proceeded to hold “that suits by [covered] entities to enforce ceiling-price contracts [the
PPAs] running between drug manufacturers and the Secretary of HHS [were also]
incompatible with the statutory regime.” 563 U.S. at 113.
But this does not end the inquiry. “‘Conflict is imminent’ when ‘two separate
remedies are brought to bear on the same activity.’” Crosby, 530 U.S. at 373 (quoting
Wis. Dep’t of Indus. v. Gould, Inc., 475 U.S. 282, 286 (1986)) (emphasis added); see
also Arizona, 567 U.S. at 402 (“Permitting the State to impose its own penalties for the
federal offenses here would conflict with the careful framework Congress adopted.”
(emphasis added)). AbbVie has identified two separate remedies, but it does not
discuss in its briefing the activities those remedies are intended to redress.
Numerous federal courts have now considered the same argument that AbbVie
sets forth here, and nearly all have found that state law enforcement schemes like that
found in the Act “do[] not conflict with Section 340B’s enforcement scheme.” E.g., Fitch,
152 F.4th at 647. Though “true that Congress made HHS the sole enforcer of Section
340B,” the Fifth and Eighth Circuits reasoned that the comparable state laws before
them “d[id] not intrude upon this authority because [they did] not impose penalties for
violations of Section 340B, like failing to offer discounted drugs to covered entities or
engaging in diversion.” Id. at 647–48 (emphasis added); McClain, 95 F.4th at 1144
(“HHS has jurisdiction over different disputes: disputes between covered entities and
manufacturers regarding pricing, overcharges, refunds, and diversion of 340B drugs to
those who do not qualify for discounted drugs.”). Rather, the state laws “impose[d]
penalties when drug manufacturers [violated the state law] by interfering with the
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distribution of Section 340B drugs pursuant to covered entities’ partnerships with
contract pharmacies.” Fitch, 152 F.4th at 648; McClain, 95 F.4th at 1145 (reasoning the
Arkansas law’s penalties were aimed at “deterring pharmaceutical manufacturers from
interfering with a covered entity’s contract pharmacy arrangements”). Put simply, the
state law penalties were “aimed at activity that falls outside the purview of 340B.”
McClain, 95 F.4th at 1145.
The same is true of the Act here. See § 6-9-105(3)(a) (“A person that violates
this [Act] . . . is subject to the enforcement provisions, civil penalties, and damages set
forth in Article 1 of this Title 6.” (emphasis added)).
Nevertheless, at the evidentiary hearing, AbbVie highlighted that, in response to
regulatory comments from stakeholders like Dr. Forbush, HRSA recently modified the
340B Administrative Dispute Resolution Regulation to explain that the 340B ADR Panel
is permitted to hear “[c]laims by a covered entity that it has been overcharged by a
manufacturer for a covered outpatient drug, including claims that a manufacturer has
limited the covered entity’s ability to purchase covered outpatient drugs at or below the
340B ceiling price.” 89 Fed. Reg. 28,643, 28,657 (Apr. 19, 2024). (See also ECF No.
111 at 105–108.) Dr. Forbush agreed during his testimony that he, personally, “wanted
the government to clarify that it counts as an overcharge of a drug when a manufacturer
imposes limits or conditions on a covered entity’s ability to purchase drugs at the 340B
price.” (Id. at 105:24–106:3.)
Notably, though, HRSA expressly declined to promulgate “an explicit definition of
the term ‘overcharge,’” instead choosing to explain only that “[w]hen an overcharge
claim is presented before a 340B ADR Panel, the Panel will follow the 340B statute” and
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“relevant case law,” among other sources. 89 Fed. Reg. at 28,649. Given the Third
and D.C. Circuits have held that manufacturers do not violate Section 340B when they
restrict a covered entity’s ability to distribute drugs to patients through contract
pharmacies, it is difficult to see how that conduct “could be challenged as a limitation on
the ability to purchase drugs at or below the ceiling price under federal law” before the
ADR Panel. Frey, 2025 WL 2813787, at *11 (emphasis added). At the very most, “the
alleged conflict is too speculative” at this stage “to support a finding that [AbbVie] is
likely to prevail on [its] claim” that the Act is preempted because it contains a conflicting
enforcement mechanism. Id.
For these reasons, the Court concludes that AbbVie has not demonstrated a
likelihood of success on the merits of its preemption claim based on a purported conflict
between the enforcement mechanisms of Section 340B and the Act.
b. 	340B Drug Pricing
Next, AbbVie argues that Section 340B and the Act are in conflict because, “like
the federal statute, [the Act] regulates pricing, not ‘delivery’ . . . .” (ECF No. 7 at 9.) The
Court is unpersuaded.
Much of AbbVie’s argument originates with the Act’s definition of a “340B drug,”
which is as follows:
. . . a drug that:
(a) 	Is a covered outpatient drug within the
meaning set forth in 42 U.S.C. sec. 256b;
(b) 	Has been subject to any offer for reduced
prices by a manufacturer pursuant to 42 U.S.C. sec.
256b(a)(1);
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(c) 	Is purchased by a covered entity. As used in
this subsection (2)(c), a drug is considered “purchased” if it
would have been purchased but for the restriction or
limitation described in section 6-29-105.
§ 6-29-103(2) (emphasis added).
First, AbbVie argues that the Act “by its very text cannot escape the word ‘price.’”
(ECF No. 7 at 9.) However, as concisely put by the Amici, “[t]he fact that [the Act]
includes ‘the word price’ . . . does not mean that it regulates price.” (ECF No. 34-1 at 7
(emphasis in original).) Indeed, the cited definition makes clear that the price is set
“pursuant to [Section 340B].” § 6-29-103(2)(b) (emphasis added); cf., e.g., McClain, 95
F.4th at 1145 (concluding substantially similar Arkansas statute “does not set or enforce
discount pricing”); PhRMA v. Murrill, 2024 WL 4361597, at *9 (W.D. La. Sept. 30, 2024)
(“[D]iscounts are set by the federal government, not the State of Louisiana or Act 358.”);
AbbVie Inc. v. Skrmetti, 2025 WL 1805271, at *18 (M.D. Tenn. June 30, 2025) (“The
amount of the discount is not at issue and is not affected by the state scheme.”).
Second, AbbVie emphasizes that the Act defines a 340B drug as inclusive of one
that “would have been purchased but for the restriction or limitation” imposed by
AbbVie’s policy. § 6-29-103(2) (emphasis added).6 In this way, the Court understands
AbbVie to argue that the Act conflicts with Section 340B because it compels AbbVie to
make sales it otherwise would have refused to make by “attach[ing] 340B discounts to
drugs shipped to for-profit pharmacies or other ‘authorized’ locations.” (ECF No. 7 at 9.)
6 In substantial part, this argument appears to be a repackaging of AbbVie’s argument
that Congress has preempted the field when it comes to the terms that manufacturers may or
may not attach to their offers of 340B drugs. The Court’s analysis as to that issue above applies
with equal force to the extent AbbVie bases its conflict preemption claim on the same grounds.
(See Section III.A.1 infra.)
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Put still another way, AbbVie insists that the Act conflicts with Section 340B because it
“grants contract pharmacies expanded access to 340B pricing.” (ECF No. 36 at 3.)
Like the Fifth Circuit, the Court understands AbbVie’s concern is that the
involvement of contract pharmacies comes with an increased risk of abuse of the 340B
Program. See Fitch, 152 F.4th at 648 (noting AbbVie’s grievance is that “it believes that
when covered entities are allowed to distribute Section 340B drugs via contract
pharmacies, those contract pharmacies cause covered entities to place orders for larger
quantities of discounted drugs than they are actually entitled to, and the contract
pharmacies then improperly resell those discounted drugs in ways that increase their
profits”). But, to again borrow the words of the Fifth Circuit, AbbVie’s suggestion that
the Act facially requires it to sell 340B drugs to non-covered entities
is simply incorrect. [The Act] does not expand Section
340B’s list of covered entities to include contract
pharmacies. By its plain text, [the Act] requires drug
manufacturers to give custody of discounted drugs to
contract pharmacies only insofar as they have partnered with
covered entities to distribute the drugs to patients. It does
not compel manufacturers to ‘offer’ discounted drugs to
contract pharmacies in the way that Section 340B compels
them to ‘offer’ these drugs to covered entities.
Id. at 647. On this record, the Court is further unconvinced that the Act will have the
practical effect of requiring AbbVie to make sales to non-covered entities in conflict with
Section 340B, such that a preliminary injunction is warranted. Cf. id. at 648 (“AbbVie is
essentially alleging that the real problem with [the Mississippi law] is not a feature of the
law, but rather a bug. And on this record, we cannot say that this potential bug in [the
state law] merits a preliminary injunction.”).
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For these reasons, the Court also concludes that AbbVie has not demonstrated a
substantial likelihood of success on the merits of its preemption claim based on its
assertion that, like Section 340B, the Act purports to regulate pricing.
c. 	Pilot Program
Third, AbbVie avers that the Act’s claims data restriction conflicts with the
impending 340B Rebate Model Pilot Program (“the “Pilot Program”), which HRSA
announced shortly after AbbVie filed the Motion. (ECF No. 52 at 2.) See also 90 Fed.
Reg. 36,163 (Aug. 1, 2025).
As pertinent background, AbbVie explains that the Pilot Program concerns the
interplay between the 340B Program and the Inflation Reduction Act’s Drug Price
Negotiation Program (“DPNP”), 42 U.S.C. §§ 1320f et seq. (Id.) Whereas the 340B
Program “requires manufacturers to offer drugs to certain ‘covered entities’ at a
statutorily calculated ‘ceiling price,’” the DPNP “requires HHS to set a ‘maximum fair
price’ (‘MFP’) for certain selected drugs,” which manufacturers must then make
“available to certain Medicare-covered individuals at the MFP.” (Id. (citing §§
1320f(a)(3), (c)(2), 1320f-2(a)(3)).) Under the DPNP’s “nonduplication” provision,
manufacturers must provide the lower of the two price concessions—the 340B ceiling
price or the MFP—but not both. (Id. (citing § 1320f-2(d)). According to AbbVie,
manufacturers, rather than HHS, “shoulder the task” of “identifying and deduplicating
340B dispenses.” (Id.)
In response to “widespread concern about the nonduplication and compliance
problems” facing manufacturers, AbbVie states that “HRSA announced the Pilot
Program to test a rebate model for effectuating the 340B price to covered entities.” (Id.
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(citing 90 Fed. Reg. at 36,163–65).) As pertinent here, the Pilot Program allegedly
permits “manufacturers . . . to request from covered entities—and covered entities are
expected to provide—claims data” to better enable manufacturers “[t]o determine which
price concession (if any) is appropriate” under the new rebate model. (Id. at 3.) AbbVie
believes that the Act poses a barrier to its participation in the Pilot Program because it
restricts manufacturers “from requiring 340B covered entities and contract pharmacies
to ‘submit any health information, claims or utilization data, purchasing data, payment
data, or other data.’” (ECF No. 52 at 3 (quoting § 6-29-105(b)).)7
The Court is not persuaded. Even setting aside the standing and ripeness issues
Defendants raised (ECF No. 74 at 2), there appears to be no conflict between the Act’s
plain text and the Pilot Program as far as claims data is concerned. AbbVie selectively
quoted the Act’s prohibitory language on the collection of claims data but ignored its
further qualification that the prohibition applies “unless such data is . . . otherwise
required to be furnished under applicable federal law.” § 6-29-105(1)(b) (emphasis
added). This caveat is further reinforced by § 6-29-105(5), which provides:
(5) Data exclusions. Subsection (1) of this section does not
prohibit a manufacturer from requiring health information or
other data that a covered entity is required to furnish to the
manufacturer under applicable federal law, including data
relating to an audit in accordance with procedures
established by the Federal Department of Health and Human
Services under 42 U.S.C. § 256b(a)(5)(C).
§ 6-29-105(5).
7 Just before the Court issued this Order, AbbVie filed a notice informing the Court that
HRSA had “officially approved” its application to participate in the Pilot Program, which is
expected to commence on January 1, 2026. (ECF No. 112.)
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Thus, to the extent the Pilot Program requires covered entities to provide certain
claims data, it appears at this point that the Act poses no barrier. For at least this
reason, the Court easily concludes that AbbVie has also not established a substantial
likelihood of success in demonstrating the Act “stands as an obstacle” to the
implementation of the Pilot Program.
B. 	Takings Clause
AbbVie’s second claim is that the Act runs afoul of the Takings Clause “because
it compels AbbVie and other manufacturers to make sales at 340B-discounted prices
under terms they would otherwise never agree to.” (ECF No. 7 at 11.)
“The Takings Clause of the Fifth Amendment, applicable to the States through
the Fourteenth Amendment, provides: ‘[N]or shall private property be taken for public
use, without just compensation.’” Cedar Point Nursery v. Hassid, 594 U.S. 139, 147
(2021). As a general matter, a government taking may occur when the government
“physically acquires private property for a public use,” or where, “rather than appropriate
private property for itself or a third party,” the government “instead imposes regulations
that restrict an owner’s ability to use his own property.” Id. at 147–48. In the Motion,
AbbVie appears to argue only the former—that the Act effects a per se taking of its
private property. (See ECF No. 36 at 8–9 (discussing Supreme Court authority holding
that “when there has been a physical appropriation, ‘we do not ask . . . whether it
deprives the owner of all economically valuable use’ of the item taken,” Horne v. Dep’t
of Agriculture, 576 U.S. 350, 363 (2015) (internal citation omitted)).) Accordingly, the
Court does not analyze herein whether the Act effects a taking as a “use restriction”
under the Penn Central test. Cedar Point, 594 U.S. at 148.
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Critically, “[a] demand for personal property” is not a taking where “it involve[s] a
voluntary exchange for a government benefit.” Valancourt Books, LLC v. Garland, 82
F.4th 1222, 1232 (D.C. Cir. 2023). So long as “the property owner is ‘aware of the
conditions’ of an exchange,” “the conditions are ‘rationally related to a legitimate
Government interest,’” and “the purported ‘benefit’ is [not] illusory,” “presenting the
exchange poses no takings problem.” Id. (quoting Ruckelshaus v. Monsanto Co., 467
U.S. 986, 1007 (1984)); see also Baker County Med. Servs., Inc. v. U.S. Atty. Gen., 763
F.3d 1274, 1276 (11th Cir. 2014) (collecting cases “instruct[ing] that no taking occurs
where a person or entity voluntarily participates in a regulated program or activity”).
As especially pertinent here, numerous Circuit Courts of Appeal have found that
regulatory requirements imposed as a condition of participation in Medicaid and
Medicare do not effect a taking. See, e.g., Baker County Med. Servs., 763 F.3d at 1279
(rejecting hospital’s takings challenge to “its rate of compensation in a regulated
industry for an obligation it voluntarily undertook . . . when it opted into Medicare and
became subject to” federal statute requiring hospitals to treat all people who seek
treatment in emergency departments); Burditt v. U.S. Dep’t of Health & Hum. Servs.,
934 F.2d 1362, 1376 (5th Cir. 1991) (similar); Minn. Ass’n of Health Care Facilities, Inc.
v. Minn. Dep’t of Public Health Welfare, 742 F.2d 442, 446 (8th Cir. 1984) (nursing
home’s voluntary decision to participate in Medicaid “forecloses the possibility that the
statute could result in an imposed taking of private property”).
Extending that rationale to the precise circumstances here, courts have found
that the voluntariness of the 340B program poses an obvious impediment to
pharmaceutical manufacturers’ Takings Clause challenges to state legislation like the
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Act. See, e.g., Frey, 2025 WL 2813787, at *14 (“Because AbbVie can choose not to
participate in the 340B program, AbbVie has not demonstrated a likelihood of success
on its takings claim.”); AstraZeneca Pharms. LP v. Bailey, 2025 WL 644285, at *4 (W.D.
Mo. Feb. 27, 2025) (“Plaintiff voluntarily chose to participate in a federal program, and
as Eighth Circuit precedent has noted, it forecloses the possibility that the federal 340B
program, or S.B. 751, results in an imposed taking of private property which would give
right to the constitutional right to just compensation.”). The Court agrees and adopts the
rationale of these decisions, and finds AbbVie’s voluntary participation in the 340B
program, at least at this early juncture of these proceedings, to present a nearly
insurmountable obstacle to the success of their Takings claim.
Still, while AbbVie acknowledges that “[v]oluntarily accepting a government
benefit in exchange for giving up property rights can extinguish a takings claim against
the government who conferred the bargained-for benefit,” it argues that its voluntarily
participation in a federal program “cannot justify separate state-imposed requirements
where no state benefit is conferred.” (ECF No. 7 at 13.) The authorities upon which
AbbVie relies to support this assertion, however, are inapposite.
In Valancourt Books, the D.C. Circuit concluded that a provision of the federal
Copyright Act “requiring copyright owners to provide physical copies of books” effected
a taking because “copyright owners receive[d] no additional benefit for the works they
forfeit[ed] pursuant to [the] deposit requirement.” 82 F.4th at 1232. The D.C. Circuit
reasoned that “[m]andatory deposit is not required to secure the benefits of copyright.”
Id. Rather, authors obtained the benefit of copyright immediately upon fixation of the
work, and the “mandatory deposit [provision] grant[ed] no additional benefits.” Id. at
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1233. Unlike copyright protection, however, AbbVie has no automatic right to receive
the benefits incidental to its participation in Medicare and Medicaid. And it cites no case
law supporting that each time the government (whether federal or state) imposes a new
regulatory requirement upon Medicaid and Medicare participants, it must also confer
some increased “benefit” of participation. Cf. Frey, 2025 WL 2813787, at *14 (“AbbVie
does not provide any persuasive authority to support the contention that each new
regulatory condition must be accompanied by a separate benefit to maintain the
voluntary nature of the program for purposes of a takings claim”).
Virginia Hospital & Healthcare Association v. Roberts is also distinguishable.
671 F. Supp. 3d 633 (E.D. Va. 2023). There, the plaintiffs’ Takings Clause claim was
based on the contention that the Virginia program at issue “legally compelled [them] to
participate in Medicaid and Medicare programs.” Id. at 666;8 see also Garelick v.
Sullivan, 987 F.2d 913, 917 (2d Cir. 1993) (where the plaintiffs argued the voluntary
participation doctrine was inapplicable “because New York law compels them to render
services to Medicare beneficiaries”). Here, AbbVie does not argue that the Act purports
to compel its participation in the 340B Program. To the contrary, it has affirmed that it
remains free, in its sole discretion, to withdraw from the Program. (ECF No. 111 at
261:4–7 (“one day laws like this are going to force manufacturers to withdraw on a
manufacturers to withdraw on a nationwide basis Medicare and Medicaid”); see also
8 Notably, the district court ultimately did “not fully determine whether Virginia’s []
program amount[ed] to legal compulsion” because the plaintiffs’ Takings Clause claim against
the state defendant was barred by the Eleventh Amendment in any event. Id. at 667.
Defendants similarly raise an Eleventh Amendment issue here, though, as noted below, the
Court does not reach that issue.
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ECF No. 98 (AbbVie’s notice of supplemental authority informing the Court that “a large
drug manufacturer announced that it will withdraw from both 340B and Medicaid next
week”).) Though that would be an unfortunate result, it appears at this juncture that
AbbVie has more likely identified a public policy issue, and not a Takings Clause
violation.
For these reasons, and most importantly because AbbVie’s participation in the
304B Program is wholly voluntary, the Court finds that AbbVie has not established a
substantial likelihood of success in demonstrating that the Act effects a per se taking.
Accordingly, the Court does not reach AbbVie’s arguments that the Act runs afoul of the
Takings Clause “public use” requirement, nor Defendants’ argument that “AbbVie
cannot bring a takings claim for injunctive relief against state officers in federal court.”
(ECF No. 33 at 10.)
IV. 	CONCLUSION
For all the foregoing reasons, Plaintiffs’ Motion for a Preliminary Injunction (ECF
No. 7) is DENIED.
Dated this 31 st day of October, 2025.
BY THE COURT:
______________________
William J. Martínez
Senior United States District Judge
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