4th Circuit Blocks West Virginia's 340B Contract Pharmacy Law — First Federal Appeals Win for Drugmakers, Deepens Circuit Split, Weakens CA AB 1460 Path
The U.S. Court of Appeals for the Fourth Circuit upheld a preliminary injunction blocking West Virginia's SB 325, which sought to prohibit manufacturers from restricting 340B contract pharmacy access and require claims/utilization data sharing. The court found the law likely preempted because it 'impermissibly rewrites the bargain Congress struck with manufacturers.'
This is the first federal appeals court win for drugmakers on state 340B contract pharmacy laws — and it deepens a circuit split with the 5th (LA) and 8th (AR) Circuits, which upheld similar state laws. AHA, WV Hospital Association, 340B Health, and ASHP petitioned for en banc review on April 17, 2026.
The ruling materially weakens the legal footing of California AB 1460 and Washington SB 5981, both of which mirror WV SB 325's approach.
Key takeaways
- CA FQHCs relying on AB 1460 contract pharmacy protections should assume legal uncertainty — the 4th Circuit's preemption framing will be cited in any PhRMA challenge to CA or WA state laws, and the 9th Circuit has not yet ruled on this question
- Watch for en banc ruling (petition filed April 17) before May 31 — denial would create binding 4th Circuit precedent and strengthen PhRMA's position in parallel lawsuits against WA SB 5981 and in anticipated CA challenges
Primary source
American Hospital AssociationFQHC Talent. (2026, March 31). 4th Circuit Blocks West Virginia's 340B Contract Pharmacy Law — First Federal Appeals Win for Drugmakers, Deepens Circuit Split, Weakens CA AB 1460 Path. Primary source: American Hospital Association. Retrieved June 12, 2026, from https://www.fqhctalent.com/intel/fourth-circuit-wv-sb325-340b-blocked-march-31-2026
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