Federal Court Upholds Louisiana Law Restricting Drug Prices

Ruling allows state to enforce limits on drug costs for low-income healthcare providers

Published on Feb. 9, 2026

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A federal appeals court has ruled in favor of Louisiana, upholding a state law that restricts drug companies from charging higher prices to certain healthcare providers that serve low-income and uninsured patients. The 'Defending Affordable Prescription Drug Costs Act' was challenged by major pharmaceutical firms, but the Fifth Circuit Court of Appeals determined the state law does not conflict with federal regulations and can be enforced.

Why it matters

The ruling is a victory for Louisiana's efforts to make prescription drugs more affordable for safety-net healthcare facilities and the vulnerable populations they serve. It could set a precedent for other states looking to rein in rising drug costs, especially for Medicaid and other government-funded healthcare programs.

The details

Louisiana's Act 358, known as the 'Defending Affordable Prescription Drug Costs Act,' prohibits drug companies from reimbursing certain 'covered entities' like federally qualified health centers and AIDS clinics at lower rates than other providers. Major pharmaceutical firms including PhRMA, AstraZeneca and AbbVie had sued the state, arguing the federal 340B drug discount program preempted Louisiana's law. However, the Fifth Circuit Court of Appeals ruled unanimously that the state law aligns with the intent of the 340B program to expand access to essential medications for vulnerable communities.

  • The federal lawsuit was filed in 2024.
  • The district court ruled in Louisiana's favor in September 2024.
  • The Fifth Circuit Court of Appeals issued its ruling upholding the state law on February 9, 2026.

The players

Louisiana Attorney General Liz Murrill

The defendant in the federal lawsuit filed by major drug companies challenging the state's prescription drug pricing law.

PhRMA

A pharmaceutical industry trade group that was one of the plaintiffs suing Louisiana over the state's drug pricing restrictions.

AstraZeneca

A major pharmaceutical company that was a plaintiff in the lawsuit against Louisiana's drug pricing law.

AbbVie

Another large drug company that joined the lawsuit against Louisiana's prescription drug pricing restrictions.

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What’s next

The drug companies may appeal the Fifth Circuit's ruling to the U.S. Supreme Court, but the high court would have to agree to take up the case.

The takeaway

This court decision affirms Louisiana's authority to regulate prescription drug prices for healthcare providers serving low-income and uninsured patients, a model that could be replicated in other states seeking to improve drug affordability and access for vulnerable populations.