A major pharmaceutical corporation alleges South Dakota has violated federal law with the passage of a bill last session.
AstraZeneca, the British pharmaceutical company responsible for developing one of the first COVID-19 vaccines, is suing the state over the passage of SB154.
That bill prohibits pharma companies from interfering in contracts between pharmacies and 340B entities. The 340B Drug Pricing Program is a federal initiative that allows healthcare providers to buy prescription drugs at discounted rates.
Put simply, pharmaceutical manufacturers couldn’t stop pharmacies from participating in programs that can reduce the cost of drugs to pharmacies.
Brookings Republican Sen. Tim Reed was the primary sponsor of the bill.
“Pharmaceutical companies were not allowing small pharmacies in our smaller communities in South Dakota to use that program – it’s a hospital program – but they would allow pharmacies to actually do the drug delivery," Reed said. "The companies, they were stopping that. We didn’t think that was right because federal law says you can do it.”
In turn, AstraZeneca contends federal law does not allow this use of the 340B program and wants to stop the state law from being utilized.
Reed says he thought this response was possible.
“I knew the lawsuit would probably happen, because in other states they had sued on the same type of bill," Reed said. "I just think that it’s unfair these pharmaceutical companies are trying to increase their profits – which they’re very profitable companies – on the backs of our smaller town pharmacies.”
AstraZeneca’s 2024 finance report shows the pharma giant made $54 billion in FY24 with a goal of reaching $80 billion in revenues by 2030.