AbbVie Inc. et al v. Skrmetti

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
ABBVIE INC. et al.,
Plaintiffs,
v.
JONATHAN SKRMETTI, in his official
capacity as ATTORNEY GENERAL OF
THE STATE OF TENNESSEE,
Defendant.
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Case No. 3:25-cv-00519
Judge Aleta A. Trauger
MEMORANDUM
Plaintiffs AbbVie Inc., Allergan, Inc., Durata Therapeutics, Inc., AbbVie Products LLC,
Pharmacyclics LLC, and Allergan Sales, LLC (collectively “AbbVie” or “plaintiffs”) filed suit on
May 6, 2025 against Jonathan Skrmetti, in his official capacity as the Attorney General of the State
of Tennessee (referred to herein as the “State”), to enjoin the enforcement of the Tennessee
Hospital Protection Act (the “Act”), Tenn. Code Ann. § 47-18-136. The Act was signed by
Tennessee Governor Bill Lee on May 5, 2025; parts of it went into effect immediately, and parts
took effect on July 1, 2025.
AbbVie’s 	Complaint 	characterizes 	the 	Act 	as 	mandating 	that 	pharmaceutical
manufacturers, including the plaintiffs, sell drugs at discounted prices to commercial pharmacies.
(Doc. No. 1, Compl. ¶ 1.) AbbVie contends that the Act thus “impermissibly chang[es] the terms
of a federal drug-pricing regime—the so-called federal “340B program”—and significantly
increase[es] the cost of participation in that regime.” (Id.) Invoking 42 U.S.C. § 1983, AbbVie
challenges the Act as unconstitutional on the grounds that it (1) violates the Supremacy Clause;
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(2) effects a taking in violation of the Takings Clause; (3) “unlawfully discriminates against or
unduly burdens interstate commerce in violation of the Commerce Clause, as established by
Dormant Commerce Clause principles”; (4) is unconstitutionally vague in violation of the Due
Process Clause; and (5) “violates the First Amendment’s Free Speech and Petition Clauses.” (Id.)
The court previously denied AbbVie’s Motion for Preliminary Injunction, which was filed
within days of its Complaint. See AbbVie Inc. v. Skrmetti (“AbbVie I”), No. 3:25-cv-00519, 2025
WL 1805271 (M.D. Tenn. June 30, 2025). Now before the court is the State’s Motion to Dismiss.
(Doc. No. 47.) For largely the same reasons articulated in the court’s Memorandum denying the
Motion for Preliminary Injunction, the Motion to Dismiss will be granted.
I. 	BACKGROUND
As also described in the court’s opinion denying AbbVie’s Motion for Preliminary
Injunction,1 Section 340B of the Public Health Service Act, 42 U.S.C. § 256b, requires
pharmaceutical companies that want to participate in Medicaid and Medicare Part B to offer steep
discounts on certain outpatient drugs to “covered entities,” a term defined to include public
hospitals and community health centers and other entities typically engaged in “car[ing] for low-
income and rural persons.” Sanofi Aventis U.S. LLC v. U.S. Dep’t of Health & Hum. Servs., 58
F.4th 696, 699 (3d Cir. 2023); see also 42 U.S.C. § 256b(a)(4) (defining “covered entity”). (See
also Compl., Doc. No. 1 ¶¶ 37–38.) This program, referred to as the “340B program,” helps
covered entities provide “safety-net services to the poor,” Astra USA, Inc. v. Santa Clara Cnty.,
563 U.S. 110, 113 (2011), because the entities “turn a profit when insurance companies reimburse
them at full price for drugs that they bought at the 340B discount,” Sanofi Aventis, 58 F.4th at 699.
1 This background section is taken nearly verbatim from the court’s Memorandum denying
AbbVie’s Motion for Preliminary Injunction, AbbVie I, 2025 WL 1805271, at *2–4, with minor
revisions.
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The 340B program is administered by the Secretary of Health and Human Services (“HHS”) and
“superintended by the Health Resources and Services Administration” (“HRSA”), which is an
HHS agency. Astra USA, 563 U.S. at 113.
“Drug manufacturers opt into the 340B Program by signing a form Pharmaceutical Pricing
Agreement (PPA) used nationwide.” Id. PPAs are “uniform agreements,” id., that “require”
participating manufacturers to “offer each covered entity covered outpatient drugs for purchase at
or below the applicable ceiling price if such drug is made available to any other purchaser at any
price.” 42 U.S.C. § 256b(a). “Covered entities may only prescribe 340B discounted drugs to
patients who qualify and may not request or receive duplicative 340B discounts and Medicaid
rebates for the same drug.” Pharm. Rsch. & Mfrs. of Am. v. McClain, 95 F.4th 1136, 1141–42 (8th
Cir.) (citing 42 U.S.C. § 256b(a)(5)(A)–(B)), pet. for rehearing en banc and by panel denied, No.
22-3675, 2024 WL 1919676 (8th Cir. May 2, 2024), cert. denied, 145 S. Ct. 768 (2024).
“Additionally, covered entities may not engage in diversion of covered outpatient drugs through
‘resell[ing] or otherwise transfer[ring] the drug to a person who is not a patient of the entity.’” Id.
at 1142 (quoting 42 U.S.C. § 256b(a)(5)(B)).
HHS and drug manufacturers are authorized to audit covered entities to ensure compliance
with the diversion and duplicate rebate prohibitions, “in accordance with procedures established
by the Secretary relating to the number, duration, and scope of audits.” Id. (citing 42 U.S.C. §
256b(a)(5)(C)). The program contains enforcement mechanisms and penalties for manufacturers
and covered entities that fail to comply with those provisions. Id. (citing Sanofi Aventis, 58 F.4th
at 700). Any disputes arising under the 340B program must first be submitted to HHS’s dispute
resolution program. Id. (citing 42 U.S.C. § 256b(d)(3)).
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Although the 340B program was apparently designed with the expectation that it would
apply to covered entities that operated in-house pharmacies, “[s]ince the beginning, covered
entities have contracted with outside pharmacies, referred to as ‘contract pharmacies,’ for the
distribution and dispensation of 340B drugs.” Id. at 1139. “Indeed, early in the 340B Program,
HRSA observed that most covered entities relied on contract pharmacies, while only about four
percent of such entities used in-house pharmacies.” Id. at 1142 (citing Notice Regarding Section
602 of the Veterans Health Care Act of 1992; Contract Pharmacy Services, 61 Fed. Reg. 43,549,
43,550 (Aug. 23, 1996) (“1996 Guidance”)).
While the Secretary of HHS “lacks rulemaking authority over the section 340B program,”
the HRSA has, on several occasions, issued non-binding “guidance” documents, such as the 1996
Guidance, “interpreting and implementing the scheme.” Novartis Pharms. Corp. v. Johnson, 102
F.4th 452, 456 (D.C. Cir. 2024). In the 1996 Guidance, the HRSA “acknowledged that section
340B ‘is silent as to permissible drug distribution systems,’” and it “sought to fill ‘gaps in the
legislation’ and thereby ‘move the program forward.’” Id. (quoting 1996 Guidance at 43,549–50).
In addition, HRSA “recognized that many covered entities use outside pharmacies to distribute
drugs to their patients,” and, to accommodate them, HRSA determined that any covered entity that
did not have an in-house pharmacy could contract with one outside pharmacy to dispense drugs at
a single location. Id. at 457 (citing1996 Guidance at 43,550, 43,555).
However, HRSA reversed course in 2010, when it issued another guidance document
“opin[ing] that covered entities may contract with an unlimited number of outside pharmacies and
may do so regardless of whether the entities have in-house pharmacies.” Id. (citing Notice
Regarding 340B Drug Pricing Program—Contract Pharmacy Services, 75 Fed. Reg. 10,272,
10,272–73 (Mar. 5, 2010) (“2010 Guidance”)). Following the issuance of the 2010 Guidance, “the
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use of contract pharmacies skyrocketed,” increasing by “twentyfold.” Sanofi Aventis, 58 F.4th at
700.
Purportedly worried that “contract pharmacies were driving up duplicate discounting and
diversion,” drug makers began to respond in 2020 by adopting policies that limited or prohibited
covered entities from contracting with outside pharmacies for the dispensation of 340B drugs to
patients. Id.; see also McClain, 95 F.4th at 1139. In some instances, these limitations “caused
covered entities dependent on contract pharmacies to become unable to serve patients in need.”
McClain, 95 F.4th at 1139.
HHS responded to these efforts, first, by “releas[ing] an Advisory Opinion declaring that
Section 340B unambiguously requires drug makers to deliver 340B drugs to an unlimited number
of contract pharmacies.” Sanofi Aventis, 58 F.4th at 701 (citing HHS Off. Gen. Couns., Advisory
Op. 20-06 on Cont. Pharmacies Under the 340B Program (Dec. 30, 2020), https://perma.cc/L7W2-
H597). Second, it issued violation letters to several drug manufacturers, who then sued HHS. Id.
The Third Circuit held that the Advisory Opinion and violation letters were unlawful because
§ 340B is silent regarding delivery to contract pharmacies. Id. at 706. The court enjoined HHS’s
“reading of Section 340B as requiring delivery of discounted drugs to an unlimited number of
contract pharmacies,” because “[l]egal duties do not spring from silence.” Id. at 707 (emphasis
added). The D.C. Circuit reached the same conclusion. See Johnson, 102 F.4th at 461 (“agree[ing]
entirely” with the Third Circuit’s conclusion that, “because section 340B is ‘silent about delivery,’
HRSA erred in concluding that the statute ‘requires drug makers to deliver drugs to an unlimited
number of contract pharmacies’” (quoting Sanofi Aventis, 58 F.3d at 703)).
Following these rulings, approximately twenty states, including Tennessee, have attempted
to fill the “silence” recognized by the Third and D.C. Circuits by passing laws that prohibit
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pharmaceutical companies from limiting the number of contract pharmacies with which covered
entities can enter agreements pertaining to the delivery of 340B drugs or otherwise imposing
distribution obstacles not required by the federal program. Under Tennessee’s Hospital Protection
Act, effective July 1, 2025, drug manufacturers and their agents and affiliates “shall not”:
(1) Impose additional requirements or limitations on a 340B entity, including
requiring the submission of any health information, claims or utilization data,
purchasing data, payment data, or other data as a condition for allowing the
acquisition of a 340B drug by, or delivery of a 340B drug to, a 340B entity unless
such data submission is explicitly required by the United States department of
health and human services or applicable state law;
(2) Require a 340B entity to reverse, resubmit, or clarify a claim after the initial
adjudication unless these actions are in the normal course of business and not
related to the 340B program;
(3) Impose any requirements relating to inventory management systems of 340B
drugs, unless such requirement is required by the United States department of health
and human services or applicable state law;
(4) Impose any requirement relating to the frequency, duration, or scope of audits
that are not imposed on pharmacies or providers that are not 340B entities;
(5) Impose requirements relating to accreditation, recertification, credentialing, or
recredentialing that are not imposed on pharmacies or providers that are not 340B
entities; or
(6) Impose any requirement determined by the attorney general and reporter to
interfere with the ability of a 340B entity to access discounts provided under the
340B program.
Tenn. Code Ann. § 47-18-136(a). Generally, in other words, pharmaceutical companies may not
impose requirements on covered entities in addition to those requirements expressly set out in
§ 340B or discriminate against covered entities by imposing upon them requirements that they do
not impose on providers that are not 340B entities.
In addition, the Act prohibits drug manufacturers from
deny[ing], impos[ing] any restrictions or prohibitions on, discriminat[ing] against,
or otherwise limit[ing] the acquisition of a 340B drug by, or delivery of a 340B
drug to, a 340B entity or other location that is under contract with, or otherwise
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authorized by, a 340B entity to receive 340B drugs on behalf of the 340B entity
unless such receipt is prohibited by the United States department of health and
human services or applicable state law.
Id. § 47-18-136(c). Subsection (c), however, also contains a “grandfather clause,” which provides
that it “does not apply to any requirements, prohibitions, limitations, or restrictions in place on or
before June 1, 2025.” Id.
The Act further provides that each violation of subsection (a) or (c)2 constitutes an “unfair
or deceptive act or practice affecting trade or commerce” in violation of the Tennessee Consumer
Protection Act (“TCPA”) and may give rise to a civil penalty of $50,000 “per violation.” Id. § 47-
18-136(d)(1). As AbbVie points out, under Tennessee law, any act deemed to be an unfair or
deceptive act or practice under the TCPA is also a Class B misdemeanor. Id. § 47-18-104(a). The
Act further states that it “must not be construed or applied to be in conflict with or less restrictive
than . . . [a]pplicable federal law and regulations.” Id. § 47-18-136(e)(1).
While there are minor differences between Tennessee’s law and the analogous statutes
passed by other states, the laws share many features, “including prohibitions on certain
manufacturer limits on covered entities and contract pharmacies, as well as alternative remedies
for violations of the prohibitions.” Pharm. Rsch. & Mfrs. of Am. v. Frey, No. 1:25-cv-00469-JCN,
2026 WL 184504, at *1 (D. Me. Jan. 23, 2026). Drug manufacturers have filed lawsuits in many
of these states to enjoin the statutes’ enforcement. There are at least thirteen district court opinions,
including one issued by this court, denying motions for preliminary injunctions or granting
defendants’ motions for summary judgment in cases filed by drug manufacturers seeking to enjoin
enforcement of state statutory schemes, three of which have been affirmed by two different circuit
2 Subsection (b) does not govern the activities of drug manufacturers and is not at issue in
this lawsuit.
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courts.3 Only two district courts have granted injunctive relief to drug manufacturers,4 and a
handful of opinions from Utah and the Western District of Missouri have denied in part motions
to dismiss filed by state defendants.5
3 Pharm. Rsch. & Mfrs. of Am. v. Murrill, No. 6:23-CV-00997, 2024 WL 4361597 (W.D.
La. Sept. 30, 2024) (granting Louisiana’s cross-motion for summary judgment), aff’d in relevant
part and reversed in part sub nom. AbbVie, Inc. v. Murrill, No. 24-30645, 2026 WL 350685 (5th
Cir. Feb. 9, 2026); AbbVie Inc. v. Fitch, No. 1:24-CV-184-HSO-BWR, 2024 WL 3503965 (S.D.
Miss. July 22, 2024), aff’d, 152 F.4th 635 (5th Cir. 2025) (affirming summary judgment for
Louisiana); Pharm. Rsch. & Mfrs. of Am. v. McClain, 645 F. Supp. 3d 890 (E.D. Ark. 2022)
(denying plaintiff’s motion for summary judgment on preemption), aff’d, 95 F.4th 1136 (8th Cir.),
pet. for rehearing en banc and by panel denied, No. 22-3675, 2024 WL 1919676 (8th Cir. May 2,
2024), cert. denied, 145 S. Ct. 768 (2024); AstraZeneca Pharms. LP v. Lopez, No. 25-00369
MWJS-WRP, 2026 WL 497141 (D. Haw. Feb. 23, 2026) (denying motion for preliminary
injunction); Frey, 2026 WL 184504 (same), appeal docketed, No. 26-1099 (1st Cir. Jan. 28, 2026);
AbbVie, Inc. v. Jackley, No. 3:25-CV-03006-RAL, 2025 WL 3706066 (D.S.D. Dec. 22, 2025)
(same); AbbVie Inc. v. Hilgers, No. 4:25-cv-3089, 2025 WL 3688051 (D. Neb. Dec. 19, 2025)
(same); AstraZeneca Pharms. LP v. Weiser, No. 25-CV-02685-PAB-STV, 2025 WL 3653161 (D.
Colo. Dec. 17, 2025) (same), appeal docketed, No. 25-1466 (10th Cir. Dec. 22, 2025); AbbVie,
Inc. v. Weiser, No. 25-CV-1847-WJM-KAS, --- F. Supp. 3d ---, 2025 WL 3041825 (D. Colo. Oct.
31, 2025) (same), appeal docketed, No. 25-1438 (10th Cir. Nov. 21, 2025); Novartis Pharms.
Corp. v. Frey, No. 1:25-CV-00407-JCN, 2025 WL 2813787 (D. Me. Sept. 23, 2025) (same),
appeal docketed, No. 25-1914 (1st Cir. Sept. 26, 2025); AbbVie Inc. v. Skrmetti, No. 3:25-cv-
00519, 2025 WL 1805271 (M.D. Tenn. June 30, 2025) (same); Novartis Pharms. Corp. v. Bailey,
No. 2:24-cv-04131-MDH, 2025 WL 595189 (W.D. Mo. Feb. 24, 2025) (same), appeal docketed
sub nom. Novartis Pharms. Corp. v. Hanaway, No. 25-1619 (8th Cir. Mar. 28, 2025); Novartis
Pharms. Corp. v. Fitch, 738 F. Supp. 3d 737 (S.D. Miss. 2024) (same), appeal docketed, No. 24-
60342 (5th Cir. July 9, 2024).
4 See AbbVie Inc. v. Drummond, Nos. CIV-25-726-PRW, 25-727-PRW, 25-1156-PRW, ---
F. Supp. 3d ---, 2025 WL 3048929 (W.D. Okla. Oct. 31, 2025) (granting in part drug
manufacturers’ motions for preliminary injunction in case challenging Oklahoma statute); Pharm.
Rsch. & Mfrs. of Am., Inc. v. Morrisey, 760 F. Supp. 3d 439 (S.D. W. Va. 2024) (granting motions
for preliminary injunction in consolidated lawsuits challenging West Virginia statute).
5 AbbVie, Inc. v. Brown, Nos. 2:25-CV-00271-RJS-DAO, 2:25-cv-00284-RJS-DAO, 2:25-
cv-00308-RJS-DAO, --- F. Supp. 3d ---2025 WL 3228898 (D. Utah Nov. 19, 2025) (dismissing
claims for violations of the Due Process and Commerce Clauses and denying motions to dismiss
claims under the Supremacy Clause and Takings Clause); Pharm. Rsch. & Manufacturers of Am.
v. Bailey, No. 2:24-cv-04144-MDH, 2025 WL 644281 (W.D. Mo. Feb. 27, 2025) (dismissing
claims for violation of the Supremacy Clause based on various theories of conflict and filed
preemption and extraterritorial regulation claims under Contracts Clause, Article IV, and Due
Process Clause, but denying motion to dismiss dormant Commerce Clause claim); AstraZeneca
Pharms. LP v. Bailey, No. 2:24-CV-04143-MDH, 2025 WL 644285 (W.D. Mo. Feb. 27, 2025)
(granting motion to dismiss as to preemption and takings claims but denying it as to contract
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II. 	THE PLAINTIFFS’ CLAIMS
In the present lawsuit, the plaintiffs are all drug manufacturers and signatories (or
successors-in-interest to signatories) to 340B Pharmaceutical Pricing Agreements with HRSA.
(Doc. No. 1 ¶¶ 23–28.) They allege that the Act “impermissibly changes the terms” of the federal
340B program and “significantly increase[es] the cost of participation in that regime.” (Doc. No.
1 ¶ 1.) They further allege that, following issuance of the 2010 Guidance effectively authorizing
covered entities to enter into contractual arrangements with an unlimited number of commercial
pharmacies, many covered entities have entered into “novel contractual arrangements” with
commercial 	pharmacies 	that 	employ 	a 	“complicated 	accounting 	system 	known 	as 	the
‘replenishment model.’” (Id. ¶ 6.)
Under the replenishment model, as described by AbbVie, covered entities enter into
contractual relationships with commercial pharmacies (“contract pharmacies”) pursuant to which
the contract pharmacies “sell manufacturers’ drugs at regular prices to pharmacy customers and
then demand that their stocks be replenished with drugs purchased by the covered entity through
the federal 340B program at discounted prices, pocketing the difference . . . for their own financial
benefit.” (Id. ¶ 42.) More specifically, a contract pharmacy obtains an
initial stock of drugs . . . through ordinary commercial purchases [from the
manufacturer] at the non-340B price. Initially, the contract pharmacy fills all
prescriptions using its own non-340B purchased inventory (that is, full price
inventory)—including those prescriptions issued by covered entities. . . . [T]he
pharmacy [subsequently] determines which previous dispenses were 340B eligible
and[,] once sufficient eligible dispenses for a particular drug accumulate, the
covered entity orders additional quantities of that drug at the federal 340B price.
The covered entity directs AbbVie to transfer those drugs to the contract pharmacy
to “replenish” the non-340B-priced drugs dispensed by the contract pharmacy on
the covered entity’s behalf. Sometimes the contract pharmacy actually places the
order on behalf of the covered entity for more drugs at the federal 340B price.
impairment claim); Novartis Pharms. Corp. v. Bailey, No. 2:24-CV-04131-MDH, 2025 WL
489881 (W.D. Mo. Feb. 13, 2025) (same).
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(Id. ¶ 63 (internal quotation marks and citations omitted). AbbVie supplies a model to illustrate
this procedure:
(Compl. 22, Fig. 1.)
AbbVie asserts that these arrangements violate both the “letter and spirit” of the 340B
statute. (Id. ¶ 44.) They allegedly violate the “spirit” of the 340B program because they do not
further the “only valid public purpose” of the program, which, according to AbbVie, is to “help[]
low-income and uninsured patients obtain access to medications at discounted prices.” (Id.)6 And
the arrangement violates the “letter,” insofar as it violates the 340B statute’s express prohibitions
of “diversion,” see 42 U.S.C. § 256b(a)(5)(B) (“With respect to any covered outpatient drug that
is subject to an agreement under this subsection, a covered entity shall not resell or otherwise
transfer the drug to a person who is not a patient of the entity”), and receiving or causing duplicate
6 In fact, as explained above, this is not the purpose of the 340B program. Instead, its purpose
is to benefit the hospitals serving low-income populations by allowing those entities to “turn a
profit when insurance companies reimburse them at full price for drugs that they bought at the
340B discount,” Sanofi Aventis, 58 F.4th at 699, which in turn allows covered entities to continue
to provide “safety-net services to the poor,” Astra USA, 563 U.S. at 113.
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discounts or rebates, see id. § 256b(a)(5)(A). (See Compl. ¶¶ 44–46.) This is because, AbbVie
believes, the replenishment model permits the “transfer” of 340B-priced drugs to contract
pharmacies “with the full knowledge that those drugs will be sold to any customer who comes in
the door, whether 340B-eligible or not.” (Doc. No. 52 at 9 (citing Compl. ¶¶ 63–64).) And contract
pharmacies are not covered entities either, though the replenishment model permits the contract
pharmacies to take title to the 340B-priced drugs, despite not being “agents” of the covered entities
but, instead, mere “business partners.” (Id. ¶ 59.)
In other words, AbbVie objects to these arrangements on the grounds that they do not
benefit indigent patients but, instead, allow contract pharmacies and covered entities to pocket
“billions of dollars every year,” allegedly “at the expense of both manufacturers and the needy
patients” the covered entities are supposed to serve. (Id.) And the arrangements purportedly
“unconstitutionally compel AbbVie to make sales under conditions it would not agree to, thereby
perpetuating the very abuses federal law forbids.” (Id. ¶ 47.)
Under its current policy, AbbVie continues to offer covered entities unlimited 340B-priced
drugs at or below the ceiling price established by the 340B program, but it will not provide
discounted drugs to unlimited, third-party contract pharmacies that are serving hospital-type
covered entities. (Doc. No. 52 at 9 (citing Compl. ¶¶ 82–84).) “Specifically, if a covered entity has
its own in-house pharmacy, AbbVie’s policy now is to take orders for the in-house pharmacy.”
(Compl. ¶ 84.) If the covered entity does not have an in-house pharmacy, “AbbVie will take orders
for one designated contract pharmacy, provided that the one contract pharmacy is located with 40
miles of the HRSA covered entity parent site, and the covered entity submits limited claims data
on 340B utilization for that pharmacy location.” (Id.) In addition, it will allow “Grantee Covered
Entities” (a term it does not define) to use “an unlimited number of contract pharmacies” if they
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agree to submit claims data through a free web-based platform. (Id.) “If a hospital covered entity
is unable to identify an eligible contract pharmacy within 40 miles, AbbVie will work with the
covered entity to identify a suitable alternative.” (Id. ¶ 85.)
AbbVie characterizes subsection (c) of § 47-18-136 as eliminating drug manufacturers’
“ability to adopt policies to prevent 340B abuse or prevent the taking of their own property by
entities not otherwise entitled to it.” (Compl. ¶ 104.) While AbbVie acknowledges the grandfather
clause in subsection (c), which expressly states that that subsection will not apply to restrictions in
place on or before June 1, 2025, AbbVie maintains that, “in practice, AbbVie’s policy likely cannot
qualify for the exception,” because it must “frequently amend and revise [its] policies to comply
with the various prohibitions and requirements” imposed by constantly changing state laws. (Id.
¶ 105.) It alleges that, if it at any time updates its policy “to reflect a new state law,” it will
automatically fall outside the protection of the grandfather clause. (Id.) For example, as of the May
6, 2025 filing date of the Complaint, AbbVie anticipated updating its “current contract pharmacy
policies in South Dakota and North Dakota, on July 1, 2025 and August 1, 2025—the two state
law’s effective dates”—meaning, according to AbbVie, that it would fall outside the protection of
the grandfather clause in § 47-18-136(c) almost immediately upon subsection (c)’s taking effect
on June 1, 2025.
AbbVie also takes issue with the restrictions included in subsection (a) of the Act—those
that prohibit drug manufacturers from (1) “requiring the submission of any health information,
claims or utilization data, purchasing data, payment data, or other data as a condition for allowing
the acquisition of a 340B drug by, or delivery of a 340B drug to, a 340B entity unless such data
submission is explicitly required by the United States department of health and human services or
applicable state law”; (2) requiring a 340B entity to “reverse, resubmit, or clarify a claim after the
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initial adjudication unless these actions are in the normal course of business and not related to the
340B program”; (3) imposing “requirements relating to inventory management systems of 340B
drugs”; (4) imposing “any requirement relating to the frequency, duration, or scope of audits that
are not 	imposed 	on 	pharmacies 	or 	providers 	that 	are not 	340B 	entities”; 	(5) 	imposing
“requirements relating to accreditation, recertification, credentialing, or recredentialing that are
not imposed on pharmacies or providers that are not 340B entities”; and (6) imposing any other
requirement that, as determined by the Attorney General, “interfere[s] with the ability of a 340B
entity to access discounts provided under the 340B program.” Tenn. Code Ann. § 47-18-136(a)(1)–
(6).
According to AbbVie, these restrictions prevent drug manufacturers from “collecting basic
claims and utilization data from covered entities”—even though the entities are already sharing
that data with the contract pharmacies. (Compl. ¶ 111.) By impairing its ability to obtain this “basic
claims data,” AbbVie says, the Act effectively prevents it from accessing the federal audit and
dispute resolution process.
It also contends that the Act impermissibly expands the federal definition of a covered
entity by defining contract pharmacies as 340B entities, adds requirements to the conditions for
participating in the 340B program, compels the transfer of AbbVie’s property “at confiscatory
prices for private use,” and allows the Tennessee Attorney General to “seek remedies for alleged
violations of the federal 340B requirements.” (Id. ¶ 113.) It also contends that violations of the Act
are characterized as a crime, through the Act’s incorporation of the TCPA, and that individual
consumers who lose money or property can also bring actions against drug manufacturers to
enforce “Tennessee’s expansion of the federal 340B program.” (Id. ¶¶ 115–16.) “Put together,”
these provisions mean that the Tennessee Attorney General can “use the full extent of his powers
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to impose severe consequences” on any manufacturer that fails to comply with the Act’s
restrictions.
Based on these and other allegations (many of which are statements of law rather than fact),
AbbVie seeks a judicial declaration that the Act is unconstitutional and a permanent injunction
barring its enforcement on the basis that: (1) the Act is preempted by federal law, under the
Supremacy Clause of the U.S. Constitution, insofar as “[e]very element of the federal 340B
program . . . is governed by federal law” (Compl. ¶ 140); (2) the Act “appropriates AbbVie’s
property rights in its drugs for the private benefit of for-profit, commercial pharmacies,” in
violation of the Constitution’s Takings and Due Process Clauses (id. ¶ 168); (3) the Act violates
AbbVie’s Fourteenth Amendment due process rights because it is unconstitutionally vague on its
face and creates the risk of arbitrary enforcement; (4) the Act violates the Dormant Commerce
Clause, insofar as it purports to regulate conduct occurring outside the territorial boundaries of the
State of Tennessee; and (5) the Act violates AbbVie’s First Amendment rights to free speech and
to petition the government for redress.
The State now moves to dismiss all of AbbVie’s claims, reprising many of the arguments
it raised in opposition to AbbVie’s Motion for Preliminary Injunction, including that AbbVie lacks
standing, along with arguments that the complaint fails to state a colorable claim for which relief
may be granted. (Doc. No. 47.) AbbVie opposes the motion (Doc. No. 52), except in part (as noted
in the context of discussing the specific claims). The American Hospital Association, 340B Health,
the Tennessee Hospital Association, and the American Society of Health-System Pharmacists
(“Amici”), with the court’s permission, filed a Brief of Amici Curiae in Opposition to the
Plaintiffs’ Motion for Preliminary Injunction (Doc. No. 40). The Amici subsequently asked the
court to deem their Brief “part of the record in connection with Defendant’s now-pending Motion
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to Dismiss” (Doc. No. 49); the court granted this request as unopposed (Doc. No. 51). The State
filed a Reply brief in further support of its motion. (Doc. No. 54.) The court also acknowledges
AbbVie’s Notices of Supplemental Authority (Doc. Nos. 59, 64), and the State’s Responses (Doc.
Nos. 60, 65).
III. 	DISCUSSION
A. 	Standing
Because standing raises the question of the court’s jurisdiction, the court must address it
first. See Miller v. Bruenger, 949 F.3d 986, 990 (6th Cir. 2020) (“Before a federal court takes up
a case’s merits, it must assure itself of its jurisdiction over the case’s subject matter.”).
Article III of the Constitution limits the jurisdiction of federal courts to “Cases” and
“Controversies.” U.S. Const. art. III, § 2, cl. 1. A case or controversy exists only when at least one
plaintiff “establish[es] that [she] ha[s] standing to sue.” Murthy v. Missouri, 603 U.S. 43, 57 (2024)
(alterations in original) (quoting Raines v. Byrd, 521 U.S. 811, 818 (1997)). To have standing, the
plaintiff must show that “(1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized
and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the
challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.” Block v. Canepa, 74 F.4th 400, 408 (6th Cir.
2023) (quoting Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 180–
81 (2000)). “These constitutional requirements—commonly known as (1) injury-in-fact, (2)
causation, and (3) redressability—apply in every case.” Welty v. Dunaway, 749 F. Supp. 3d 882,
901 (M.D. Tenn. 2024).
When, as here, a plaintiff challenges a state law prior to the commencement of an
enforcement action against him, “whether the plaintiff has standing to sue often turns upon whether
he can demonstrate an ‘injury in fact.’” McKay v. Federspiel, 823 F.3d 862, 867 (6th Cir. 2016)
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(quoting Kiser v. Reitz, 765 F.3d 601, 607 (6th Cir. 2014)). “[A]n allegation of future injury may
satisfy the injury-in-fact requirement if the alleged threatened injury is certainly impending, or
there is a substantial risk that the harm will occur.’” Id. (internal quotation marks omitted) (quoting
Susan B. Anthony List v. Driehaus, 573 U.S. 149, 158 (2014)). In this context, “a threat of
enforcement is ‘sufficiently imminent’ to constitute an injury in fact if the plaintiff alleges (1) an
intent ‘to engage in a course of conduct’ arguably ‘affected with a constitutional interest,’ (2) that
this conduct is arguably ‘proscribed by a statute,’ and (3) that there is ‘a credible threat’ of the
statute’s enforcement against the plaintiff.” Christian Healthcare Ctrs., Inc. v. Nessel, 117 F.4th
826, 843 (6th Cir. 2024) (quoting Susan B. Anthony List, 573 U.S. at 159).
The State argues, first, that AbbVie cannot establish a credible threat of criminal
enforcement of the Act, because the Attorney General is not empowered to initiate criminal
prosecutions. Indeed, in Tennessee, only District Attorneys—not the Tennessee Attorney General
who is the only defendant in this case—can bring criminal charges. Accord Friends of George’s,
Inc. v. Mulroy, 108 F.4th 431, 439 (6th Cir. 2024) (“[A] district attorney general has the sole duty,
authority, and discretion to prosecute criminal matters in the State of Tennessee.” (quoting State
v. Spradlin, 12 S.W.3d 432, 433–34 (Tenn. 2000))), cert. denied, 145 S. Ct. 1178 (2025). In
addition, as the State points out, while criminal charges under the TCPA are technically possible,
AbbVie does not allege any instance in which any district attorney has brought such criminal
charges. AbbVie does not respond to this argument, likely because the court already held, in ruling
on the Motion for Preliminary Injunction, that AbbVie has not alleged a credible fear of
enforcement of, and therefore lacks standing to challenge, the criminal enforcement provisions of
the TCPA that are incorporated into the Hospital Protection Act. The court reiterates that finding
here: AbbVie lacks standing to challenge the criminal enforcement provision of the TCPA.
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Likewise, the court already determined, in addressing the Motion for Preliminary
Injunction, that AbbVie lacked standing to challenge subsection (c) of the Act, because AbbVie
cannot show a credible threat of imminent enforcement of that provision against it in light of the
grandfather clause, notwithstanding AbbVie’s speculation about the potential effect of its
anticipated modification of its policies to address other states’ changing legal landscapes. As this
court stated in AbbVie I,
[t]he grandfather clause would not apply to new or more stringent restrictions, but
simply altering the drugs included in its 340B program . . . or limiting the states to
which the restriction applies based on courts’ enforcement of laws similar to [the
Act] in those states (which would have no effect on the restriction in place in
Tennessee), would not remove the policy from the protection of the grandfather
clause. AbbVie, in other words, cannot establish a credible threat of imminent
enforcement of [§ 47-18-136(c)] against it.
AbbVie I, 2025 WL 1805271, at *9. That holding continues to apply. In other words, AbbVie has
not established preenforcement standing to challenge subsection (c).
The State continues to argue that AbbVie lacks standing to bring its claims regarding the
vagueness and extraterritorial reach of the Act, asserting that AbbVie offers “only the most
threadbare and conclusory assertions about how it might test the law’s supposed gray areas” and
no allegations at all suggesting that there is a credible threat of enforcement of those provisions by
the Attorney General in a way that would “test the limits of his enforcement authority.” (Doc. No.
47 at 17.) The State also argues very generally that AbbVie has not alleged that it “intends to
violate any—much less every—provision of the Hospital Protection Act” and that it fails to
identify even one Tennessee hospital to which it sells 340B drugs and from which it intends to
require “submission of claims data.” (Doc. No. 47 at 15.)
Without actually addressing standing or the court’s previous opinion, the State appears to
acknowledge that AbbVie has plausibly alleged that its current policy of limiting the number of
contract pharmacies to which it will deliver 340B drugs is proscribed by the Act, but it argues that
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this policy does not put “every provision of the Hospital Protection Act at issue”; instead, at most,
it “would put the prohibition on delivery restrictions at issue.” (Id. at 16.) The State argues that it
would be more sensible for the court to address the constitutionality of that provision of the Act if
and when the Attorney General actually brings an enforcement action against AbbVie or another
manufacturer. (Id.) It also argues that, if AbbVie were “limited to litigating the validity of that
restriction only, its various theories of obstacle preemption, extraterritorial reach, vagueness, and
the right to petition would be irrelevant.” (Id.) Finally, the State argues that AbbVie simply has
not established a basis for the “sweeping” declarations and “injunction covering every attempt to
ever enforce the Hospital Protection Act.” (Id. at 17.)
It is true that the Complaint seeks declarations stating that the Act, in its entirety, is
unlawful based on the plaintiffs’ various theories, and the plaintiffs seek to enjoin the enforcement
of the Act in its entirety. (See Compl. at 72–73.) The factual allegations in the Complaint, however,
do not suggest that AbbVie intends to violate every portion of the Act. Still, regarding the Act’s
subsection (a), AbbVie’s articulated policies clearly implicate the claims data restrictions set forth
in Tenn. Code Ann. § 47-18-136(a)(1), and AbbVie clearly pleaded facts indicating that its policies
conflict with that provision, as well as, potentially at least, the dispute resolution and audit
limitations in subsections (a)(3) and (4). As the court has already stated, “what the Act says is
undisputed; AbbVie has clearly articulated its policy; [and] while the State has not affirmatively
admitted that AbbVie’s ‘current practices violate [the Act],’ they obviously do; and it is undisputed
that [the Act] was enacted for the purpose of countering policies like AbbVie’s.” AbbVie I, 2025
WL 1805271, at *9. The court finds that AbbVie has standing to bring its challenges to at least
parts of subsection (a). Whether it states colorable claims is a wholly different question.
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B. 	Substantive Claims
As noted above, while the State proceeds as though it were still an active issue, AbbVie
acknowledges in its Response to the defendant’s Motion to Dismiss that the court has already
concluded that AbbVie lacks standing to challenge Tenn. Code Ann. § 47-18-136(c). (See Doc.
No. 52 at 19 (recognizing that the court held that “AbbVie’s contract-pharmacy limitation is
exempted from the statute’s reach” by the grandfather clause, and “the remainder of the statute’s
provisions cannot be construed to prohibit the same conduct as subsection (c).” (citing AbbVie I,
2025 WL 1805271, at *9–10 & n.7)).)
Assuming that that ruling continues to apply, AbbVie consents to the dismissal without
prejudice of all of its claims that are premised upon the Act’s prohibiting AbbVie’s contract-
pharmacy limitations—the very limitations the court found to be permitted by the grandfather
clause. The claims implicated by subsection (c) include AbbVie’s claims under the Takings
Clause, field preemption related to prescription pricing and eligibility under the 340B program,
and the Dormant Commerce Clause.7 Because the court’s previous determination that AbbVie
lacks standing to challenge subsection (c) continues to apply, as already discussed above, the
claims depending on that subsection will be dismissed without prejudice. This leaves for resolution
(1) the Supremacy Clause/preemption claim related to subsection (a) of the Act; (2) the Due
Process claim based on vagueness and “unbounded delegation”; and (3) the First Amendment
claim premised on the violation of AbbVie’s right to “petition the government for redress.”
7 AbbVie offers arguments in support of these claims in case the court finds that it has
standing to bring its challenges to subsection (c).
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1. 	Preemption Under the Supremacy Clause
“Federalism, central to the constitutional design, adopts the principle that both the National
and State Governments have elements of sovereignty the other is bound to respect.” Churchill
Downs Tech. Initiatives Co. v. Mich. Gaming Control Bd., 162 F.4th 631, 637 (6th Cir. 2025)
(quoting Arizona v. United States, 567 U.S. 387, 398 (2012)). On the other hand, the Supremacy
Clause states that “[t]his Constitution, and the Laws of the United States which shall be made in
Pursuance thereof . . . shall be the supreme Law of the Land . . . , any Thing in the Constitution or
Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. Under the
Supremacy Clause, when federal and state laws “‘conflict or [are] at cross-purposes,’ . . . the
Supremacy Clause ‘provides a clear rule’ that federal law wins out.” Id. (internal quotation marks
omitted) (quoting Arizona, 567 U.S. at 399). In other words, federal laws enacted by Congress
may preempt state laws. Id.
Although the Supremacy Clause does not “include[] a private right of action,” Armstrong
v. Exceptional Child Ctr., Inc., 575 U.S. 320, 326 (2015), a plaintiff may seek “declaratory or
injunctive relief against a state or local government that is presently taking or threatening action
against the plaintiff pursuant an allegedly preempted state law,” Chase Bank USA, N.A. v. City of
Cleveland, 695 F.3d 548, 554 n.4 (6th Cir. 2012). There are two types of preemption, both of
which are implicated in this case: field preemption and conflict preemption.
a) 	Field Preemption
Field preemption is “fundamentally . . . a question of congressional intent.” English v. Gen.
Elec. Co., 496 U.S. 72, 78–79 (1990). It arises “when federal law is so ‘pervasive’ in one particular
field that it exclusively occupies that field.” Torres v. Precision Indus., Inc., 995 F.3d 485, 491
(6th Cir. 2021) (quoting In re Schafer, 689 F.3d 601, 614 (6th Cir. 2012)). “States are precluded
from regulating conduct in a field that Congress, acting within its proper authority, has determined
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must be regulated by its exclusive governance.” Id. (quoting Arizona, 567 U.S. at 399). However,
“[b]ecause preemption can trammel upon state sovereignty, courts apply a ‘strong presumption’
against implied preemption in fields that States traditionally regulate.” Id. (quoting Merrick v.
Diageo Ams. Supply, Inc., 805 F.3d 685, 694 (6th Cir. 2015)). Specifically, “state or local
regulation of matters related to health and safety” are presumed not to be preempted under the
Supremacy Clause.” Hillsborough Cnty. v. Automated Med. Labs., Inc., 471 U.S. 707, 715 (1985).
In denying AbbVie’s Motion for Preliminary Injunction, this court already concluded that
AbbVie had failed to show that Congress intended to preempt the entire field of drug distribution.
In its response to the defendant’s Motion to Dismiss, AbbVie argues that, at a minimum, § 47-18-
136(a)(1) “improperly enters an exclusive federal field by seeking to regulate (and eliminate) a
liberty that the 340B statute includes: the ability of manufacturers to include claims data conditions
in their 340B offers.” (Doc. No. 52 at 16.) As the State points out, this is an entirely different
theory of field preemption than the one AbbVie raised in moving for a preliminary injunction.
Regardless, the court finds that Congress’s silence on the issue of whether a manufacturer can
require claims data as a condition of offering drugs to covered entities at the 340B price does not
suggest Congress’s intent to occupy that “field” exclusively, so field preemption does not apply.
b) 	Conflict Preemption
Conflict preemption applies if a state law “directly conflict[s]” with federal law—that is,
“when compliance with both is impossible, or when . . . state law ‘stand[s] as an obstacle to the
accomplishment’ of Congress’s objectives.” Churchill Downs, 162 F.4th at 638 (first quoting
PLIVA, Inc. v. Mensing, 564 U.S. 604, 617 (2011); and then quoting Kansas v. Garcia, 589 U.S.
191, 210–11 (2020)).
AbbVie raises three distinct arguments for why conflict preemption applies. First, it
contends that the Act’s prohibition on requiring covered entities to provide claims data “stands as
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an obstacle to the accomplishment and execution of the full purposes and objectives of Congress”
in the 340B program, insofar as it “prevent[s] AbbVie from obtaining basic claims data,” and thus
“hamstrings AbbVie’s ability to avail itself of the [340B] Program’s enforcement tools.” (Doc.
No. 52 at 14 (citing § 47-13-146(a)(1)).)
Second, it contends that the state statute directly conflicts with a recently adopted “rebate
pilot program” intended to “address concerns about the compliance burdens created by the overlap
between the [recently enacted] Inflation Reduction Act’s Drug Price Negotiation Program and the
340B Program.” (Id.)
Third, it argues that the Act’s creation of a parallel state enforcement mechanism is an
obstacle to the creation of a centralized federal enforcement scheme intended to permit the
Executive Branch to “administer both Medicaid and § 340B harmoniously and on a uniform,
nationwide basis.” (Id. at 16 (quoting Astra, 563 U.S. at 120).) AbbVie contends that the Act
impedes that goal by “bringing questions about the federal statute into a state forum,” including
such questions as what entities qualify as 340B entities, what qualifies as a “340B drug,” “how
that price must be made available,” and “what constitutes an ‘additional requirement[] or
limitation[]’ to, or ‘interfere[nce]’ with, a 340B transaction.” (Id.)
The court finds that these issues are all largely illusory problems. First, AbbVie expressly
concedes that “no rule in the 340B Program has ever required covered entities to provide claims
data to manufacturers.” (Doc. No. 52 at 15.) Because federal law never expressly required covered
entities to provide claims data, AbbVie cannot explain how the state law expressly conflicts with
federal law. This is particularly so here, where the state law at issue stipulates that manufacturers
may not “require[e] the submission of any . . . claims or utilization data . . . unless such data
submission is explicitly required” by federal or state law. Tenn. Code Ann. § 47-18-136(a)(1).
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Regarding AbbVie’s third argument, it is clear that the 340B program does occupy the field
of audits and the enforcement of the 340B program, and federal law defines what entities qualify
as covered entities, which drugs are covered, and the pricing scheme that applies to covered drugs
purchased by covered entities. Accord AbbVie, Inc. v. Murrill, No. 24-30645, 2026 WL 350685,
at *5 (5th Cir. Feb. 9, 2026) (identifying the fields that the 340B program does and does not
regulate). But AbbVie’s contentions that the state law disrupts these areas are wholly speculative.
More to the point, the fact that the Act may call upon state regulators (and potentially state courts)
to construe terms used in federal statutes and regulations does not suggest preemption. Regardless,
the state statute does not set up a parallel enforcement scheme; it provides only for the enforcement
of the Tennessee law.
Regarding AbbVie’s access to the federal enforcement scheme, the Tennessee law only
prohibits imposing across-the-board requirements relating to “frequency, duration, or scope of
audits” that are not imposed on pharmacies and providers not involved in the 340B program, either
as contract pharmacies or covered entities. Tenn. Code Ann. § 47-18-136(a)(4). AbbVie does not
plausibly allege facts suggesting that this requirement in any way interferes with its ability to
participate in the federal dispute resolution process or to request audits in accordance with the
procedure established by the 340B regulations, as the court explained exhaustively in denying
AbbVie’s Motion for Preliminary Injunction. See AbbVie I, 2025 WL 1805271, at *14–17.
The Fifth Circuit (which has now had two occasions to address state laws in this arena)
recently reconfirmed that the 340B regulatory scheme “is not ‘so pervasive that Congress left no
room for state supplementation.’” Murrill, 2026 WL 350685, at *5 (quoting AbbVie, Inc. v. Fitch,
152 F.4th 635, 646 (5th Cir. 2025)). It defined the areas that 340B “does regulate: price ceilings
for covered outpatient drugs; eligibility criteria for covered entities; prohibitions on duplicate
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discounts 	and 	diversion; 	audit 	and 	enforcement 	mechanisms; 	and 	the 	terms 	governing
manufacturers’ and wholesalers’ sales of discounted drugs to covered entities.” Id. (citation
omitted). And what it “conspicuously does not regulate: ‘neither the distribution of drugs to
patients nor the role of pharmacies in this distribution.’” Id. (quoting Fitch, 152 F.4th at 646); see
also id. at *7 n.61 (noting that the Louisiana statute at issue “does not address the pharmaceutical
companies’ agreements with HHS or the pricing, diversion, or ‘double dipping’ restrictions
addressed in the HHS[] enforcement scheme” (citation omitted)).
The same analysis applies here, and the court finds that AbbVie’s Complaint fails to state
a colorable claim based on either field preemption or conflict preemption under the Supremacy
Clause, requiring dismissal of the Complaint’s First Claim for Relief.
2. 	Due Process Claims
The Complaint asserts that the Act violates AbbVie’s Fourteenth Amendment due process
rights because it is unconstitutionally vague on its face and creates the risk of arbitrary
enforcement. 	(See 	Compl. 	¶¶ 	176–88.) 	AbbVie 	points 	specifically 	to 	subsections 	(a)(3)
(prohibiting 	requirements 	relating 	to 	inventory 	management 	systems), 	(a)(4) 	(prohibiting
requirements relating to the “frequency, duration, or scope of audits that are not imposed on
pharmacies or providers that are not 340B entities”), and (a)(6) (which contains a catch-all
prohibition on “[i]mpos[ing] any requirement determined by the attorney general and reporter to
interfere with the ability of a 340B entity to access discounts provided under the 340B program”)
(Id. ¶¶ 179, 180, 182.)
Regarding (a)(6), AbbVie contends that this provision impermissibly delegates open-ended
enforcement discretion to the Attorney General and leaves manufacturers to “guess what conduct
[he] might consider ‘interference.’” (Id. ¶ 179.) It objects to (a)(3) because the statute does not
define “what constitutes a ‘requirement’” or explain how it “must ‘relate’ to an inventory
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management system, or even what an ‘inventory management system’ is.” (Id. ¶ 180.) It objects
to (a)(4) because the Act does not define “providers that are not 340B entities” and further contends
that, if the term “audit” does not mean the federal audit process, then it is “unconstitutionally
vague.” (Id. ¶ 182.)
“In our constitutional order, a vague law is no law at all.” United States v. Davis, 588 U.S.
445, 447 (2019). Due process “bars enforcement of ‘a statute which either forbids or requires the
doing of an act in terms so vague that men of common intelligence must necessarily guess at its
meaning and differ as to its application.’” United States v. Lanier, 520 U.S. 259, 266 (1997)
(quoting Connally v. Gen. Constr. Co., 269 U.S. 385, 391 (1926)). At the same time, however, the
Due Process Clause does not require precision. See United States v. Theunick, 651 F.3d 578, 585
(6th Cir. 2011) (“[T]he practical necessities of discharging the business of government inevitably
limit the specificity with which legislators can spell out prohibitions.” (quoting Boyce Motor Lines
v. United States, 342 U.S. 337, 340 (1952))). Thus, “no more than a reasonable degree of certainty
can be demanded. Nor is it unfair to require that one who deliberately goes perilously close to an
area of proscribed conduct shall take the risk that he may cross the line.” Boyce Motor Lines, 342
U.S. at 340.
Regarding subsections (a)(3) and (a)(6), this court already held as follows:
[T]hese provisions, read in the context of the statute as a whole and considered from
the perspective of a reasonable business person—and, more specifically, a
reasonable drug manufacturer—provide adequate notice of what conduct is
prohibited and do not invite arbitrary enforcement. The Act is targeted at precisely
the conduct in which AbbVie and other drug manufacturers want to engage in order
to limit the expansion of the 340B program. That is, the State seeks to ensure that
drug manufacturers do not impose restrictions on covered entities’ access to 340B
discounted drugs that are not expressly authorized by federal law. The word
“requirement” is not ambiguous in this context. It has its ordinary dictionary
meaning 	of 	“something 	required,” 	a 	“necessity,” 	or 	a 	condition—that 	is,
“something 	essential 	to 	the 	existence 	or 	occurrence 	of 	something 	else.”
Requirement, 	Merriam-Webster 	Online 	Dictionary, 	https://www.merriam-
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webster.com/dictionary/requirement 	(last 	visited 	June 	27, 	2025). 	“Inventory
management system,” given the context in which it appears, obviously refers to the
replenishment model to which AbbVie strenuously objects—and to virtually any
other inventory system covered entities and contract pharmacies might devise, so
long as they are compliant with federal law. Thus, subsection (a)[(3)] prohibits drug
manufacturers from imposing any inventory-related conditions upon the delivery
of 340B discounted drugs to covered entities.
Similarly, ordinarily intelligent drug manufacturers would not need to guess at the
meaning of the term “interfere” as used in subsection (a)(6). As another district
court observed in addressing a similar challenge to a similar statute enacted in
Mississippi,
Black’s Law Dictionary defines “interference” as “[t]he act or process of
obstructing normal operations or intervening or meddling in the affairs of
others.” Interference, Black's Law 	Dictionary 	(11th ed. 2019). 	[The
Mississippi statute] thus prohibits manufacturers from “obstructing [the]
normal operations” of, “or intervening or meddling in the affairs” of a
contract pharmacy receiving and dispensing 340B drugs to 340B patients.
Pharm. Rsch. & Mfrs. of Am. v. Fitch, No. 1:24-CV-160-HSO-BWR, 2024 WL
3277365, at *14 (S.D. Miss. July 1, 2024). As that court concluded:
The statute plainly requires manufacturers to deliver 340B drugs to contract
pharmacies 	and 	prohibits 	manufacturers 	from 	obstructing 	contract
pharmacies in their dispensation of 340B drugs. The Court need not
determine 	the 	precise 	contours 	of 	the 	statute 	in 	every 	hypothetical
application because Plaintiff’s “facial challenge may only be sustained if
the enactment is impermissibly vague in all of its applications.”
Id. (quoting McClelland v. Katy Indep. Sch. Dist., 63 F.4th 996, 1013 (5th Cir.
2023), cert. denied, 144 S. Ct. 348, 217 L.Ed.2d 186 (2023), reh’g denied, 144 S.
Ct. 629 (2024)).
AbbVie I, 2025 WL 1805271, at *21–22; see also Murrill, 2026 WL 350685, at *11 (finding that
the term “interfere” as used in the Louisiana statute at issue there is not unconstitutionally vague).
The court adopts its prior holding here and finds that the Complaint fails to state a void-for-
vagueness claim in connection with subsections (a)(3) and (a)(6).8
8 AbbVie I mistakenly referred to subsection (a)(4) as containing the prohibition on imposing
requirements related to “inventory management systems,” when the court intended to refer to
(a)(3).
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AbbVie did not argue for a preliminary injunction in connection with (a)(4), the provision
relating to requirements relating to the frequency, duration, or scope of audits, but that provision
is not unconstitutionally vague either. The use of the term “audits” is obviously intended, by
context, to mean the same thing as “audits” in the 340B regulations, and the term “pharmacies or
providers that are not 340B entities,” given its ordinary meaning, refers to entities that are not
“covered entities.” AbbVie does not plausibly allege that subsection (a)(4) is so vague that
pharmaceutical manufacturers of ordinary sophistication will be left to guess at its meaning.
The Complaint fails to state a Due Process void-for-vagueness claim, and its Third Claim
for Relief will be dismissed.
3. 	First Amendment Claims
The First Amendment protects “the right of the people . . . to petition the Government for
a redress of grievances.” U.S. Const. amend. I. “This right ‘extends to all departments of the
Government.’” EJS Props., LLC v. City of Toledo, 698 F.3d 845, 863 (6th Cir. 2012) (quoting Cal.
Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510 (1972)). “[T]he ‘right to petition [is]
one of the most precious of the liberties safeguarded by the Bill of Rights.’” Lozman v. Riviera
Beach, 585 U.S. 87, 101 (2018) (quoting BE & K Constr. Co. v. NLRB, 536 U.S. 516, 524 (2002)).
“[T]he right allows an ordinary citizen to ‘convey[] the special concerns of [the petition’s] author
to the government,’ and to ‘request[] action by the government to address those concerns,’
generally without fear of criminal or civil repercussions.” Rudd v. City of Norton Shores, 977 F.3d
503, 513 (6th Cir. 2020) (alterations in original) (quoting Borough of Duryea v. Guarnieri, 564
U.S. 379, 388–89 (2011)).
AbbVie’s Complaint asserts that the Act violates AbbVie’s First Amendment rights to free
speech and to petition the government for redress (Doc. No. 1 at 69), but it focuses its arguments
on the latter, arguing that the First Amendment protects its right to “engage in targeted, meaningful
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communication necessary to petition the government for redress, which includes access to the
[dispute resolution] process.” (Doc. No. 52 at 18.) It asserts that the Act violates that right by
effectively barring AbbVie from accessing the federal dispute resolution process established by
the 340B regulations, which require a “good faith” inquiry prior to seeking HRSA resolution, “and
part of that good faith inquiry necessarily requires AbbVie to seek clarity on claims from covered
entities.” (Id. at 19.) .
The plain language of the statute refutes AbbVie’s contentions. In particular, subsection
(a)(2) of the Act, from which AbbVie’s reference to “seeking clarity” is drawn, states that drug
manufacturers may not “[r]equire a 340B entity to . . . clarify a claim after the initial adjudication
unless [this] action[] [is] in the normal course of business and not related to the 340B program.”
Tenn. Code Ann. § 47-18-136(a)(2). Similar to the provision on requiring claims data, nothing in
the Act prevents AbbVie from requesting information (as opposed to requiring it), and nothing
prevents it from requesting clarity in the “normal course of business.” Id. AbbVie’s contention that
it will in the future somehow be barred from seeking an audit or accessing the federal dispute
resolution process as a result of covered entities’ failure to provide information, whether clarity or
claims data, requested by AbbVie in good faith amounts to nothing more than speculation.9
AbbVie does not plausibly allege that the Act impedes its ability to petition the government.
As the court explained further in denying preliminary injunctive relief,
For the same reasons propelling the court to reject AbbVie’s preemption claim
rooted in the same allegations, the court finds that [§ 47-18-136(a)] does not
obstruct AbbVie’s right to petition the government by barring its access to the
federal ADR system relating to 340B claims. In particular, nothing prevents
AbbVie from simply requesting claims data or other documentation from covered
entities (or pharmacies) or from requesting an audit of a covered entity based upon
reasonable cause. A covered entity’s failure to comply with a reasonable request—
9 The speculative nature of AbbVie’s claims calls into question its standing to bring the
claims in the first place.
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coupled with the articulable facts that gave rise to suspicions of diversion or other
prohibited conduct in the first place . . . —would be sufficient to establish such
reasonable cause. And the plaintiffs have not [alleged concrete] facts suggesting, to
the contrary, that the standards for requesting an audit require any particular type
of claims data or other documentation from the covered entity.
AbbVie I, 2025 WL 1805271, at *24 (alterations added).
In short, the court finds that the Complaint fails to plausibly allege that the Act violates
AbbVie’s First Amendment right to petition the government. This claim, too, will be dismissed.
IV. 	CONCLUSION
For the reasons set forth herein, the State’s Motion to Dismiss (Doc. No. 47) will be
granted. Those claims premised upon Tenn. Code Ann. § 47-18-136(c), which AbbVie lacks
standing to challenge in the preenforcement context, will be dismissed without prejudice. This
includes AbbVie’s takings claims, its Supremacy Clause challenge to subsection (c), and its
dormant Commerce Clause claim. Its First Amendment, Due Process, and Supremacy Clause
challenge related to subsection (a) will be dismissed with prejudice.
An appropriate Order is filed herewith.
ALETA A. TRAUGER
United States District Judge
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