Pharmacy is a highly litigated corner of healthcare, with major fights running on four separate tracks: state laws banning PBMs from owning pharmacies, drugmakers challenging state 340B protections, PBMs facing antitrust claims over reimbursement practices and fraud enforcement actions tied to rebate and claims manipulation. Here’s where each stands.
1. PBM ownership bans are drawing immediate legal challenges.
Tennessee became the second state to ban PBMs from owning pharmacies when Gov. Bill Lee signed the Freedom, Access and Integrity in Registered Pharmacy Act, giving affected companies until Jan. 1, 2027, to divest or restructure. CVS Health sued days later, arguing the law unconstitutionally favors in-state businesses, conflicts with federal rules governing employer health plans and Medicare, and amounts to an uncompensated taking of property. CVS estimates the law puts $3.7 billion in annual Tennessee revenue at risk.
Cigna’s Express Scripts followed with its own suit, claiming more than 180,000 patients could be affected and that relocating its Accredo specialty pharmacy could cost $113 million and take 18 months. Arkansas, the first state to pass a similar ban, remains tied up before the 8th Circuit Court of Appeals after a federal judge issued a preliminary injunction in 2025.
2. State 340B contract pharmacy laws are producing conflicting court outcomes.
A federal judge permanently blocked North Dakota’s 340B law in April, ruling it violated the Supremacy Clause and Commerce Clause by interfering with the federal program, and granting summary judgment in part to AbbVie and PhRMA. But drugmakers haven’t won everywhere. A federal judge denied Novartis’ bid to block Washington’s 340B law in June, finding the company hadn’t shown a likelihood of success on its constitutional claims.
The split extends nationally. The 4th Circuit has sided with drugmakers in Maryland and West Virginia cases, while the Supreme Court rejected a challenge to Arkansas’ law and the 5th Circuit upheld Mississippi’s protections.
3. PBM price-fixing allegations are compounding.
Nearly 5,000 independent pharmacies filed a federal antitrust lawsuit against Prime Therapeutics on July 2, alleging the PBM conspired with Express Scripts since 2019 to suppress reimbursement rates and raise fees. The claim has precedent. An arbitrator ruled in January 2025 that Prime violated antitrust law through the identical price-fixing arrangement, awarding the AIDS Healthcare Foundation $10.3 million in treble damages.
Separately, CVS Health, CaremarkPCS and CVS Specialty face lawsuits alleging they artificially deflated reimbursement on 340B specialty drug claims and pocketed the spread between what insurers paid and what hospitals received, with the University of Kansas alleging CVS terminated its pharmacy agreement after it raised concerns.
CVS is also facing regulatory scrutiny beyond the courtroom. Florida’s attorney general opened an investigation in June into CVS and Caremark over allegations of patient steering and reimbursement disparities affecting independent pharmacies, and the FTC remains in active litigation against CVS Caremark and OptumRx over related specialty drug pricing claims.
4. Eli Lilly’s 340B enforcement push and a related fraud case are both active.
Lilly’s deadline for hospitals to submit claims-level data or lose 340B pricing has passed, leaving roughly 1,000 noncompliant covered entities exposed to suspended discounts on its full product portfolio. Tampa General Hospital has since sued Lilly over the pulled discounts, alleging the move violates Florida’s unfair trade practices law and citing drug cost increases of 25% to 50%, including a 35.9% jump for Mounjaro.
Separately, a federal judge granted Lilly a preliminary injunction in June against a group of pharmacies and wholesalers accused of orchestrating a rebate fraud scheme that cost the drugmaker more than $200 million, barring the defendants from submitting further rebate claims without supporting documentation. On the regulatory side, a federal judge blocked HHS’ 340B Rebate Model Pilot Program days before its planned Jan. 1 launch after the AHA and Maine Hospital Association sued, arguing the shift from upfront discounts to post-dispense rebates violated the Administrative Procedure Act.
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