Novartis and AbbVie marched into federal court on Wednesday, trying to stop Washington state from enforcing a brand‑new drug pricing law they say will bleed them of steep, unrecoverable discounts. The legal blitz landed the very same day Gov. Bob Ferguson signed Senate Bill 5981, a measure meant to shield safety‑net clinics and hospitals that depend on the federal 340B discount program. The companies are asking for an injunction so the law does not kick in this June while the fight plays out.
As reported by Tacoma Daily Index, AbbVie says the statute would cost it "tens of millions of dollars in unrecoverable discounts," while Novartis argues that complying would cause "unrecoverable financial harms" and millions in yearly losses. Both drugmakers filed complaints in the U.S. District Court for the Western District of Washington and asked judges for an initial order that would temporarily block the law. Their filings cast the state measure as out of sync with federal 340B rules and as a direct threat to manufacturers' business models.
What Senate Bill 5981 requires
Senate Bill 5981 bars manufacturers from denying or restricting the acquisition or delivery of 340B drugs to covered entities and their contract pharmacies and it forbids conditioning sales on the submission of proprietary data, according to the bill text. The measure also creates new reporting requirements and allows the state attorney general, along with covered providers themselves, to enforce penalties for violations. The law passed this legislative session and is scheduled to take effect in June 2026; Washington State Legislature records show how those changes are codified.
Why drugmakers say the law will hurt them
Drugmakers argue the law stretches beyond what federal 340B rules require and would expose them to steep price concessions and new compliance costs, as reported by Washington State Standard. Novartis told the court that if it has to comply, it will "lose millions of dollars annually" and shoulder added administrative burdens. AbbVie warned in its filings of "cascading constitutional problems" if the statute stands. Supporters pushed back during the legislative debate, arguing the law is really about protecting patients and the safety‑net providers that serve them.
How big the 340B program has become
The federal 340B program has exploded in size in recent years. Covered entities bought about $81.4 billion in outpatient drugs at 340B prices in 2024, according to Drug Channels and its analysis of Health Resources and Services Administration data. That followed a record high of roughly $44 billion in 2021, a figure highlighted in peer‑reviewed research and federal reports. National Institutes of Health publications note that the program's rapid growth has reshaped hospital finances and sharpened policy disputes that states are now attempting to settle.
Legal precedent gives both sides ammunition
The manufacturers' argument that federal law preempts Washington's statute lands in the middle of a mixed legal landscape. Legislative analyses point out that federal appellate courts have upheld similar protections in Arkansas and Mississippi, and supporters of SB 5981 repeatedly cited those rulings during committee hearings. The companies, however, insist the Washington law conflicts with federal requirements and raises constitutional red flags. The Ninth Circuit could eventually be asked to sort out how those earlier rulings square with the claims now in front of a federal judge. A Washington State Legislature bill report summarizes the prior decisions.
What happens next
Both companies are pushing for preliminary relief that would put SB 5981 on ice while their constitutional and preemption arguments are considered. The attorney general's office says it is reviewing the filings and plans to defend the statute, and Gov. Ferguson has said his signature reflects careful policy and legal review. As Tacoma Daily Index reports, the state's formal response had not yet been filed as of the initial coverage, leaving both the timing and the courtroom strategy unclear with the June effective date looming.
Supporters argue SB 5981 will restore transparency and protect clinics that rely on 340B revenue to serve uninsured and low‑income patients. Advocates at organizations such as the Moses Lake Community Health Center told lawmakers that the program helps fund chronic‑care and mental‑health services, a point that surfaced repeatedly during debate on the bill, as reported by Washington State Standard. The outcome of the federal court fight will determine whether Washington's approach becomes a model for other states or just another chapter in the ongoing national legal battle over how the 340B program should work.
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