Pharmaceutical company AstraZeneca sues Utah Attorney General over discount medication law
SALT LAKE CITY ( ABC4 ) — The pharmaceutical company AstraZeneca has filed a federal lawsuit against Utah Attorney General Derek Brown and Utah Insurance Commissioner Jon Pike over a recent law that is intended to allow more pharmacies to have access to drug discount programs.
In a lawsuit filed May 23, AstraZeneca alleges that Utah SB 69 is unconstitutional. The law was introduced and passed in the 2025 state legislative session, and it went into effect on May 7.
The law prohibits drug manufacturers from restricting pharmacies from working with 340B entities, which help pharmacies and patients access medications at a discounted price.
The 340B Drug Pricing Program is a federal program that “enables covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services,” according to the Health Resources and Services Administration (HRSA) website. It means that drug manufacturers participating in Medicaid agree to provide “outpatient drugs to covered entities at significantly reduced prices.”
All organizations need to be registered and enrolled in the 340B program in order to purchase discounted medications.
The law that established the 340B Program, Section 340B(a)(4) of the Public Health Service Act, specified certain types of organizations that are eligible for the program, such as medical centers that serve rural and other underserved communities and clinics that specialize in particular diseases like HIV/AIDS.
SB 69 expands the scope, requiring drug manufacturers to provide the discounts to third-party pharmacies that are contracting with 340B entities, and this is what AstraZeneca is claiming is unconstitutional in its lawsuit.
The lawsuit states that because price controls “disincentivize innovation and destabilize markets,” Congress chose to specifically limit the types of organizations that are eligible in Section 340B.
The suit notes that for-profit pharmacies like Walgreens or CVS were not included as eligible, and there have already been several federal court cases ruling that block efforts to require drug manufacturers to provide discounts to contracted pharmacies.
AstraZeneca claims in its suit that SB 69 “requires pharmaceutical manufacturers to offer 340B-discounted pricing for sales at an unlimited number of contract pharmacies,” expanding 340B discounts to “an entirely new category of transactions not covered by Section 340B itself.”
The suit alleges that SB 69 directly conflicts with federal law requirements, and therefore, it cannot be enforced against Astrazeneca or other drug manufacturers.
AstraZeneca is asking the court to declare SB 69 unconstitutional and to order that Utah AG Derek Brown and Insurance Commissioner Jon Pike not enforce the law against AstraZeneca.
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