Kutak Rock attorneys Fred Davis, Jess Askew III and Shayla Dawson helped win summary judgment upholding Arkansas Act 1103 of 2021 against a challenge by a major drug manufacturer. The ruling protects Arkansas safety-net providers in the federal 340B Drug Pricing Program. As the U.S. Supreme Court has noted, these providers “perform valuable services for low-income and rural communities but have to rely on limited federal funding for support.” Act 1103 bars drug manufacturers from refusing to deliver 340B drugs to the contract pharmacies these providers, such as public hospitals and community health centers, use to dispense drugs to patients.

In March 2024, AstraZeneca Pharmaceuticals sued the Arkansas Insurance Department (AID) Commissioner in the U.S. District Court for the Eastern District of Arkansas. AstraZeneca claimed that federal patent law preempts Act 1103 and that the Act violates the U.S. Constitution. Kutak Rock client Dallas County Medical Center (DCMC), a nonprofit critical access hospital in Fordyce, Arkansas, intervened to defend the Act.

On September 29, 2026, Chief U.S. District Judge Kristine G. Baker granted summary judgment to AID and DCMC on all claims. In the Court’s words, “Section 340B sets the price of the discounted drugs; Act 1103 merely dictates that those drugs must be made available at more locations—namely, at unlimited contract pharmacies.” The Court noted that the Arkansas Legislature “has evidently determined that dispensation of 340B drugs at contract pharmacies advances public health, which falls squarely within its police powers.”

The ruling follows PhRMA v. McClain, 95 F.4th 1136 (8th Cir. 2024), cert. denied, 145 S. Ct. 768 (2024), in which the Eighth Circuit affirmed the district court’s earlier ruling upholding Act 1103 against a separate challenge. The ruling also matches decisions by other courts, including the Fifth Circuit, that declined to block similar laws in other states.

Kutak Rock worked alongside Powers Pyles Sutter & Verville P.C., lead national counsel for DCMC, as well as counsel for AID. The Powers team included Ronald S. Connelly, Barbara Straub Williams, William H. von Oehsen III, Hannah Hauer and Fernando Montoya. AID’s counsel included Sara Farris, AID General Counsel.

Fred Davis, a partner in Kutak Rock’s litigation group, resolves disputes and provides outside general counsel services to technology, healthcare, and financial-services companies.

Jess Askew III is a partner who handles business and class-action litigation and constitutional, education, media and appellate matters.

Shayla Dawson is an associate who represents clients in federal and state court in real estate, contract, bankruptcy, healthcare, insurance defense, election law and other commercial disputes.