Pharmaceutical Research and Manufacturers of America, Appellant,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A25-0805

Pharmaceutical Research and Manufacturers of America,
Appellant,

vs.

Keith Ellison, et al.,
Respondents.

Filed February 17, 2026
Affirmed
Wheelock, Judge

Ramsey County District Court
File No. 62-CV-24-5744

Barbara Podlucky Berens, Berens & Miller, PA, Minneapolis, Minnesota; and

Andrew D. Prins (pro hac vice), Latham & Watkins LLP, Washington, District of
Columbia (for appellant)

Keith Ellison, Attorney General, Peter J. Farrell, Deputy Solicitor General, Peter Wenker,
Assistant Attorney General, St. Paul, Minnesota (for respondents)

David W. Asp, Derek C. Waller, Lockridge Grindal Nauen PLLP, Minneapolis, Minnesota;
and

William B. Schultz (pro hac vice), Zuckerman Spaeder LLP, Washington, District of
Columbia (for amici curiae Minnesota Hospital Association, American Hospital
Association, 340B Health, and American Society of Health-System Pharmacists)

Considered and decided by Reyes, Presiding Judge; Larkin, Judge; and Wheelock,
Judge.
2
NONPRECEDENTIAL OPINION
WHEELOCK, Judge
Appellant association appeals the district court’s grant of the state respondents’
motion to dismiss its complaint challenging Minnesota Statutes section 62J.96 (2024) as
unconstitutional. We affirm.
FACTS
Appellant Pharmaceutical Research and Manufacturers of America (PhRMA) is a
trade association representing pharmaceutical manufacturers. PhRMA filed a complaint in
district court seeking declaratory and injunctive relief against respondents State of
Minnesota, the Minnesota Attorney General, and members of the Minnesota Board of
Pharmacy.1 PhRMA’s complaint alleged that Minnesota Statutes section 62J.96 violates
the Single Subject and Title Clause of the Minnesota Constitution, is preempted by federal
law, and violates the dormant Commerce Clause of the United States Constitution. The
district court granted the state’s motion to dismiss the complaint, determining that all of
PhRMA’s claims failed to state a claim under Minn. R. Civ. P. 12.02.
To understand PhRMA’s claims and the events that led to th e underlying lawsuit,
we summarize the federal 340B program and enactment of the statute PhRMA challenges
before returning to the facts and procedural history of the present litigation.
The term “340B” refers to a federal drug-pricing program established by Congress
in 1992. See Veterans Health Care Act of 1992, Pub. L. No. 102- 585, § 602, 106 Stat.

1 Respondents are referred to collectively as “the state” except when necessary to
distinguish between parties.
3
4943, 4967-71 (incorporating section 340B of the Public Health Service Act, codified as
42 U.S.C. § 256b (2018)). The 340B program requires drug manufacturers, as a condition
of participation in Medicaid and Medicaid Part B, to agree to offer drugs at discounted
prices to statutorily defined “covered entities,” which are, “dominantly, local providers of
medical care for the poor.” Astra USA, Inc. v. Santa Clara County, 563 U.S. 110, 131
(2011); accord 42 U.S.C. § 256b(a)(1), (4). These covered entities p rovide medical care
to underserved populations but have limited federal funding for support, and the 340B
program was designed in part to support this work. Am. Hosp. Ass’n v. Becerra, 596 U.S.
724, 738 (2022).
Under the 340B program, the Secretary of Health and Human Services (HHS) enters
into a prescription pricing agreement with each manufacturer. Participating manufacturers
agree to offer their drugs to any covered entity at a price no higher than the “ceiling price”
if the drug is made available to any other purchaser at any price. A statutory formula sets
the program’s “ceiling price” for each drug, which is also referred to as the “340B price.”
42 U.S.C. § 256b(a)(1), (4), (b)(1). In some instances, the 340B price can be as low as a
penny per unit, and covered entities benefit financially through insurance reimbursements
for the cost of drugs that exceeds the 340B price that a covered entity paid. Novartis
Pharms. Corp. v. Johnson, 102 F.4th 452, 455-56 (D.C. Cir. 2024) (citing 340B Drug
Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation,
82 Fed. Reg. 1210, 1211 (Jan. 5, 2017)).
Because operating an in-house pharmacy is cost-prohibitive for many covered
entities, they regularly contract with outside pharmacies, referred to as “contract
4
pharmacies,” to dispense drugs purchased through the 340B program (“340B drugs”) to
their patients. Pharm. Rsch. & Mfr s. of Am. v. McClain, 95 F.4th 1136, 1139 (8th Cir.),
cert. denied, 145 S. Ct. 768 (2024). Recognizing the necessity of this practice, the Health
Resources and Services Administration (HRSA ) of HHS issued guidance in 1996 stating
that covered entities without their own pharmacy may contract with one contract pharmacy.
Contract Pharmacy Services, 61 Fed. Reg. 43,549, 43,549-50 (Aug. 23, 1996) (notice).
But in 2010, HRSA issued new guidance stating that covered entities may contract
with an unlimited number of contract pharmacies. Notice Regarding 340B Drug Pricing
Program— Contract Pharmacy Services, 75 Fed. Reg. 10,272, 10,272-73 (Mar. 5, 2010).
This new guidance resulted in “significant expansion” of the 340B program. Novartis,
102 F.4th at 457. In 2024, the D.C. Circuit held in Novartis that section 340B allows
manufacturers to contractually limit the distribution of discounted drugs, explaining that
several Government Accountability Office reports indicated an approximately 34%
increase in covered entity participation in the program between 2010 and 2019 but a
1,700% increase in the number of contract pharmacies during the same time period. Id.
It is this increase in contract-pharmacy use by covered entities that PhRMA alleges
“has morphed [the federal program] into a money-making enterprise for national pharmacy
chains and others who seek to enrich themselves at the expense of these underserved
patients.” PhRMA alleged in its complaint that contract pharmacies, although not allowed
to profit from 340B pricing because they are not covered entities, have leveraged the
program to enhance their profits by using a “replenishment model.” This means, in
essence, that the contract pharmacies commingle 340B and non-340B drugs in the same
5
inventory and sell 340B drugs to patients who may not be eligible for the discount. PhRMA
alleges that the pharmacies then retroactively, and often incorrectly, identify which sales,
if any, were to patients receiving the drugs through a covered entity and were thus eligible
for the 340B price. After this retroactive determination, pharmacies request additional
340B drugs at the 340B price from the manufacturers to replenish their general inventory.
PhRMA asserts that this creates a financial incentive for contract pharmacies to catalog as
many prescriptions as possible as being eligible for the 340B price because the covered
entity, contract pharmacy, and any third-party claims administrator divide and retain a
portion of the difference in cost between the 340B price and the higher insurance
reimbursement rate.
PhRMA also alleges that, because the “complex networks” of contract pharmacies
make it difficult to obtain reliable data, the replenishment model can result in unlawful
duplicate discounting if the manufacturer sells drugs at the 340B price and then also
provides a rebate to the state Medicaid agency for the same sale. See 42 U.S.C.
§ 256b(a)(5)(A) (stating that it is unlawful to seek or cause a duplicate Medicaid discount).
In response to their concerns about contract pharmacies and these billing practices,
some PhRMA members began adopting policies “to address the 340B abuses.”
One of those policies is a limitation on the number and location of contract pharmacies to
which manufacturers are willing to ship 340B drugs; another is requiring certain claims
data to be provided to manufacturers as a condition of sale. In 2020, HHS issued an
advisory opinion stating that federal law requires manufacturers to deliver 340B drugs to
any contract pharmacy that a covered entity chooses without limitation on the number of
6
contract pharmacies a covered entity may use . U.S. Dep’t of Health & Hum. Servs., Off.
Gen. Counsel, Advisory Opinion No. 20-06 (Dec. 30, 2020); see also Novartis, 102 F.4th
at 458. HRSA then sent enforcement letters to manufacturers indicating that a
manufacturer’s duty under the 340B program to provide the 340B drugs to a covered entity
cannot be qualified or restricted based on how a covered entity chooses to distribute 340B
drugs to their patients . Novartis, 102 F.4th at 458-59. HHS withdrew advisory opinion
20-06 in June 2021. U.S. Dep’t of Health & Hum. Servs., Off. Gen. Counsel, Withdrawing
Advisory Opinion 20-06 on Contract Pharmacies under the 340B Program (June 18, 2021)
(notice).
In recent cases, however, federal courts have ruled that a manufacturer’s duty to
offer 340B drugs to covered entities under the manufacturer’s agreement with HHS does
not encompass an unlimited number of contract pharmacies. See Novartis, 102 F.4th at
464 (holding that the 340B program does not prohibit manufacturers from imposing
reasonable conditions on distribution); Sanofi Aventis U.S. LLC v. U.S. Dep’t of Health &
Hum. Servs., 58 F.4th 696, 707 (3d Cir. 2023) (concluding that HRSA’s enforcement of
HHS advisory opinion 20-06 overstepped the 340B program’s bounds because Congress
did not say manufacturers must deliver to an unlimited number of contract pharmacies).
PhRMA alleges that the states were “dissatisfied with the outcomes” of these lawsuits in
federal court, which were contrary to HHS’s advisory opinion, and that, in response, states,
including Minnesota, began enacting legislation to prevent manufacturers from interfering
with covered entities’ agreements with contract pharmacies.
7
In 2024, the legislature passed Minnesota Statutes section 62J.96, which says, in its
entirety:
Subdivision 1. Manufacturers. A manufacturer must not
directly or indirectly restrict, prohibit, or otherwise interfere
with the delivery of a covered outpatient drug to a pharmacy
that is under contract with a 340B covered entity to receive and
dispense covered outpatient drugs on behalf of the covered
entity, unless the delivery of the drug to the pharmacy is
prohibited under the 340B Drug Pricing Program.

Subd. 2. Definitions. (a) For purposes of this section,
the following definitions apply.
(b) “340B covered entity” has the meaning
provided in section 340B(a)(4) of the Public Health Service
Act.
(c) “Covered outpatient drug” has the meaning
provided in section 1927(k) of the Social Security Act.
(d) “Manufacturer” has the meaning provided in
section 151.01, subdivision 14a.

Subd. 3. Expiration. This section expires July 1, 2027.

2024 Minn. Laws ch. 121, art. 4, § 3, p. 2155 (codified at Minn. Stat. § 62J.96). The statute
prohibits manufacturers from preventing delivery of a covered entity’s 340B drugs to
contract pharmacies for dispensing to the covered entity’s patients. PhRMA has since
brought the underlying lawsuit seeking to invalidate this statute.
Returning to the present litigation, in addition to filing a motion to dismiss for failure
to state a claim in the district court, the state also asserted that PhRMA lacked standing.
The district court rejected that argument and determined that PhRMA has organizational
standing to bring its claims against each respondent. It then determined that PhRMA failed
to state a claim because section 62J.96 does not violate the Single Subject or Title Clause
of the Minnesota Constitution, is not preempted by federal law, and does not violate the
8
dormant Commerce Clause of the United States Constitution. Based on those
determinations, the district court then granted the state’s motion to dismiss PhRMA’s
complaint.
PhRMA appeals.
DECISION
PhRMA argues that each of the claims in its complaint is sufficient to withstand a
motion to dismiss, and it asks this court to reverse the district court’s order dismissing
them. The state argues that the district court erred when it determined that PhRMA has
standing and asks that this court affirm dismissal for that reason, and in the alternative, it
argues the district court correctly determined that PhRMA’s pleadings fail to state a claim
and that we should affirm dismissal on that ground. Because “[s]tanding is a threshold
consideration in determining whether a litigant is entitled to have the courts determine the
merits of a dispute,” we address it first. Hanson v. Woolston, 701 N.W.2d 257, 261 (Minn
App. 2005); accord In re Consol. Hosp. Surcharge Appeals, 883 N.W.2d 778, 784 (Minn.
2016).
We then address PhRMA’s argument that each of the following claims survives a
motion to dismiss: first, that section 62J.96 violates the Single Subject and Title Clause of
the Minnesota Constitution because the bill the legislature passed that contained
section 62J.96 was not germane to drug regulation and its title was too broad; second, that
we should depart from federal caselaw and conclude that section 62J.96 is preempted by
federal law; and third, that section 62J.96 violates the extraterritoriality doctrine of the
dormant Commerce Clause. Ultimately, we conclude that PhRMA has standing but that
9
its claims fail as a matter of law and thus the district court did not err in granting the state’s
motion to dismiss.
I. PhRMA has standing.
“Standing is a legal requirement that a party have a sufficient stake in a justiciable
controversy to seek relief from a court.” Lorix v. Crompton Corp., 736 N.W.2d 619, 624
(Minn. 2007) (citing Sierra Club v. Morton , 405 U.S. 727, 731-32 (1972)); Webb Golden
Valley, LLC v. State, 865 N.W.2d 689, 693 (Minn. 2015). Because it is a question of law,
we review standing de novo. Minn. Sands, LLC v. County of Winona, 940 N.W.2d 183,
192 (Minn. 2020); see also Surcharge Appeals, 883 N.W.2d at 784 (“[W]e evaluate
decisions on standing de novo.” (Quotation omitted.)).
“An organization can assert standing if its members’ interests are directly at stake
or if its members have suffered an injury -in-fact.” Builders Ass’n of Minn. v. City of St.
Paul, 819 N.W.2d 172, 177 (Minn. App. 2012) (citing State by Humphrey v. Philip Morris
Inc., 551 N.W.2d 490, 497-98 (Minn. 1996) ). “To demonstrate an injury-in -fact, the
plaintiff must point to an injury that is fairly traceable to the defendants’ challenged action
and that is likely to be redressed by a favorable decision.” Scheffler v. City of Anoka, 890
N.W.2d 437, 451 (Minn. App. 2017), rev. denied (Minn. Apr. 26, 2017). Economic injury
may be sufficient to establish standing, so long as it is not abstract or speculative. Builders
Ass’n of Minn., 819 N.W.2d at 176 (citing State v. Knutson, 523 N.W.2d 909, 911 (Minn.
App. 1994), rev. denied (Minn. Jan. 13, 1995)).
At the pleading stage, general factual allegations of injury resulting from the
defendant’s conduct may suffice, “ for on a motion to dismiss we presume that general
10
allegations embrace those specific facts that are necessary to support the claim.” Forslund
v. State, 924 N.W.2d 25, 32 (Minn. App. 2019) (quoting Lujan v. Defs. of Wildlife, 504 U.S.
555, 561 (1992)).
PhRMA’s complaint alleged that its members, who manufacture and sell
pharmaceutical products and participate in the 340B program, have adopted policies
restricting contract pharmacy use by covered entities but will be required to deliver
340B drugs they produce to more pharmacies at a steeply reduced price because of
section 62J.96. It alleged that, because the federal statute does not require the members to
deliver their 340B drugs to an unlimited number of contract pharmacies, section 62J.96’s
requirement that they do so will cause economic loss. It also asserts that such injuries
would be redressed by a court declaring section 62J.96 unconstitutional.
It is undisputed that section 62J.96 is aimed at prohibiting PhRMA’s members’
policies on restricting the delivery of their 340B drugs to contract pharmacies.
Accordingly, PhRMA’s members’ interests are directly at stake. See Builders Ass’n of
Minn., 819 N.W.2d at 177. PhRMA alleges that section 62J.96 affects its members’ ability
to conduct commercial transactions that are otherwise in accordance with federal law. This
alleged injury is not abstract or speculative, and thus, it is sufficient to establish standing.
See Knutson, 523 N.W.2d at 911 (“A party must have more than an abstract concern and
the injury must not be merely speculative.”).
The state argues that, because it has not enforced section 62J.96 against PhRMA’s
members and the statute contains no explicit enforcement provision giving any state
respondent authority to enforce it, PhRMA has failed to plead a sufficient injury to establish
11
standing.2 We conclude that the state respondents each have authority to enforce the
statute, and we reject this argument.
The attorney general has broad powers and may “institute, conduct, and maintain
all such actions and proceedings as he deems necessary for the enforcement of the laws of
this state, the preservation of order, and the protection of legal right.” State by Hatch v.
Am. Fam. Mut. Ins. Co., 609 N.W.2d 1, 3 (Minn. App. 2000), rev. denied (Minn. June 13,
2000); see also Minn. Stat. § 8.31, subd. 2 (2024) (stating that the attorney general has
power to investigate and take such steps as are necessary to cause the arrest and prosecution
of any person for violation of laws respecting unfair, discriminatory, or other unlawful
practices in business, commerce, or trade). The board of pharmacy has the authority to
regulate the manufacture and wholesale of drugs in Minnesota. Minn. Stat. § 151.06,
subd. 1(2) (2024). It further has enforcement authority over licensed drug manufacturers.
Minn. Stat. § 151.071, subd. 2(9) (2024) (providing that the board can revoke licenses and
impose civil monetary penalties).

2 The state relies on a federal district court decision to support its argument. In AbbVie,
Inc. v. Ellison, the District of Minnesota dismissed pharmaceutical manufacturer AbbVie’s
constitutional claims challenging section 62J.96, determining that, because the statute did
not empower either the attorney general or the board to enforce it, AbbVie did not have
standing for purposes of federal “injury.” 777 F. Supp. 3d 971, 977 (D. Minn. 2025). But
Minnesota courts are “not bound by the standing constraints of Article III of the United
States Constitution,” even when claims are based on federal law. Growe v. Simon,
2 N.W.3d 490, 499 n.6 (Minn. 2024); see also Lorix, 736 N.W.2d at 626 (recognizing a
“desire for harmony” between federal and state courts on substantive law but emphasizing
that Minnesota is not bound by federal standing law); All. for Metro. Stability v. Metro.
Council, 671 N.W.2d 905, 913 (Minn. App. 2003) (recognizing that Minnesota has adopted
liberal standards for standing).
12
Because PhRMA has demonstrated that its members have suffered
injuries-in-fact—including an economic impact and limit on their ability to conduct
commercial transactions—that is traceable to the enactment of section 62J.96, we conclude
that PhRMA has standing.
Having resolved the threshold question of standing, we next consider whether the
district court erred when it dismissed the complaint for failure to state a claim.
II. The district court did not err when it determined that each of PhRMA’s claims
must be dismissed for failure to state a claim.
“We review de novo whether a complaint sets forth a legally sufficient claim for
relief. We accept the facts alleged in the complaint as true and construe all reasonable
inferences in favor of the nonmoving party.” Walsh v. U.S. Bank, N.A., 851 N.W.2d 598,
606 (Minn. 2014) (citation omitted).
A claim is sufficient to withstand a motion to dismiss for failure to state a claim if
it is possible, on any evidence which might be produced consistent with the pleader’s
theory, to grant the relief demanded. Id. at 603. Under this rule , a pleading will be
dismissed only if it appears to a certainty that no facts that could be introduced consistent
with the pleading would support granting the relief demanded. Id. at 602. We consider
each of PhRMA’s claims in turn.
A. PhRMA has not pleade d a viable claim that section 62J.96 violates the
Single Subject and Title Clause requirements of the Minnesota
Constitution.

PhRMA argues that it sufficiently pleaded that section 62J.96 violates the
Minnesota Constitution. First, it argues that, because the bill that enacted section 62J.96
13
includes several provisions about cannabis regulation, the subject of the bill is actually
cannabis, and the inclusion of section 62J.96 in the bill violates the single-subject
requirement. It further contends that, as section 62J.96 purports to regulate the federal
340B program, this statute is not germane to the subject of cannabis. Second, it argues, as
to the title requirement, that the use of “commerce” in the title of the bill was too broad to
be informative.
When determining whether a statute is constitutional, we proceed with the
presumption that it is constitutional and we exercise the power to declare a statute
unconstitutional with extreme caution. Assoc. Builders & Contractors v. Ventura,
610 N.W.2d 293, 298- 99 (Minn. 2000). The challenger has an “extraordinary burden of
persuasion in order to overcome the general presumption of constitutional validity.” Otto
v. Wright County, 910 N.W.2d 446, 459 (Minn. 2018) (quoting Blanch v. Suburban
Hennepin Reg’ l Park Dist., 449 N.W.2d 150, 157 (Minn. 1989) (Popovich, C.J.,
concurring)).
Article IV, section 17 of the Minnesota Constitution states: “No law shall embrace
more than one subject, which shall be expressed in its title.” The first clause is the Single
Subject Clause, and the second clause is the Title Clause. Minn. Const. art. IV, § 17. The
two clauses “serve independent though interrelated purposes.” Wass v. Anderson,
252 N.W.2d 131, 134 (Minn. 1977). We consider each clause below.
1. Single Subject Clause
The supreme court has identified two purposes for the Single Subject Clause. The
first purpose is to prevent “log-rolling a legislative process by which a number of different
14
and disconnected subjects are united in one bill.” Otto, 910 N.W.2d at 456 (quotations
omitted). The second purpose is “to prevent surprise and fraud upon the people and the
legislature by failing to provide notice of the nature of the proposed legislation and the
interests likely to be affected.” Id. The clause is construed liberally. Id.
The test for a challenge under this clause is “germaneness.” Id. at 458. The test and
the clause are satisfied if the bill is germane to one general subject. Assoc. Builders,
610 N.W.2d at 299. The supreme court has explained the broad nature of this test:
The term “subject,” as used in the constitution, is to be given a
broad and extended meaning . . . . All that is necessary is that
the act should embrace . . . some one general idea, be so
connected with or related to each other, either logically or in
popular understanding, as to be parts of, or germane to, one
general subject.
Johnson v. Harrison, 50 N.W. 923, 924 (Minn. 1891), cited with approval in Otto,
910 N.W.2d at 458 n.11. If the germaneness test is met, there is no need to consider
legislative history. Otto, 910 N.W.2d at 457 n.10; see also Unity Church of St. Paul v.
State, 694 N.W.2d 585, 597 (Minn. App. 2005) (“What the Minnesota Constitution
requires is germaneness. It does not require the absence of legislative maneuvering to enact
unpopular, but germane, bills.”). In considering a single-subject challenge, we may look
at the title of a bill because “it presents words and phrases suggesting the common thread
among the provisions.” Defs. of Wildlife v. Ventura, 632 N.W.2d 707, 713 n.1 (Minn. App.
2001), rev. denied (Minn. Oct. 24, 2001).
15
Here, H.F. 4757, the bill that enacted section 62J.96, states it is “[a]n act relating to
commerce”; in full, the bill is identified as follows:
An act relating to commerce; modifying
appropriations to the Office of Cannabis Management and the
Department of Health; modifying cannabis provisions;
modifying fees assessed by the Department of Commerce;
adding and modifying consumer protection provisions;
establishing the Minnesota Consumer Data Privacy Act;
authorizing rulemaking; classifying data; making technical
changes; requiring reports; appropriating money; [remainder
listing additions and amendments].

2024 Minn. Laws ch. 121, at 2041.
Notwithstanding that the title of H.F. 4757 —“A n act relating to commerce” —
identifies the general subject of the bill as “commerce,” PhRMA contends that its subject
is actually cannabis and that section 62J.96’s regulation of the 340B program is not
germane to cannabis. In making this argument, PhRMA primarily relies on Associated
Builders, an opinion in which the supreme court concluded that an amendment on
prevailing wage law that was included in a bill violated the single -subject requirement
because the subject of the bill was taxation and government operations and the wage–law
amendment was not sufficiently related to taxation and government operations to be
germane. 610 N.W.2d at 304. The supreme court observed that, if it were to uphold the
amendment, which had no connection to the other subjects and required that certain wages
be paid regardless of whether a project was publicly funded or not, its decision “ would
push the mere filament to a mere figment.” Id. at 303.
Associated Builders is materially different. The provision that was struck down was
contained in a bill entitled in part, “[a]n act relating to the financing and operation of state
16
and local government.” Id. at 297 (quotation omitted). The title contained no reference to
labor, wages, or anything that would suggest the presence of a prevailing-wage-law
amendment. Id. at 304; see Defs. of Wildlife, 632 N.W.2d at 713 n.1 (addressing the title
in a single-subject challenge to identify the “common thread”). Moreover, in Otto, its most
recent decision addressing the single-subject requirement, the supreme court clarified that
its decision in Associated Builders was narrowly focused on the connection between the
title and the alleged subject in that case, which counsels against its broad application here.
Otto, 910 N.W.2d at 457 (discussing Assoc. Builders, 610 N.W.2d at 295-304).
In Otto, the appellant raised a single- subject challenge to a law by focusing on the
title of that bill—“an act relating to the operation of state government”—to argue that the
subject “operation of state government” was too broad to be a single subject that connected
the provisions of the bill. 910 N.W.2d at 456. The supreme court, however, rejected that
argument, reasoning that “[a] provision that allows counties to choose between the State
Auditor and a private . . . firm for the annual audit required by statute . . . is clearly germane
to the subject of state government operations.” Id. at 457. It further explained that
categorizing it as too broad would be “inconsistent with our earlier cases that define
‘subject’ with a ‘broad and extended meaning,’ encompassing one general matter that falls
‘under some one general idea.’” Id. (quoting Johnson, 50 N.W. at 924). The supreme
court thus concluded, “Consistent with our precedent, the subject —‘the operation of state
government’—is not too broad to pass constitutional muster in a challenge to legislation
that addresses the roles and responsibilities of state entities.” Id.
17
The subject of H.F. 4757 is commerce. The bill consists of five articles, and
section 62J.96 is located in article 4, titled “Commerce Policy.” Like other bills upheld
against a single-subject challenge, H.F. 4757 includes provisions on a limited number of
topics: appropriations, cannabis policy, commerce policy, and consumer data privacy. Cf.
Defs. of Wildlife, 632 N.W.2d at 713 (noting the challenged bill contained only seven
topics). PhRMA urges us to determine that, instead of commerce, the subject of H.F. 4757
is cannabis, seemingly because the article containing cannabis-related provisions is the
longest part of the bill. But PhRMA does not meaningfully dispute that the regulation of
340B drug delivery, like the regulation of cannabis, is included within the common thread
of commerce. See id. (considering title to identify the common thread of provisions in a
bill).
Based on Otto, the term “commerce” is a general subject with a broad and extended
meaning that is logically related to the delivery of goods —which is precisely what
section 62J.96 purports to regulate. To determine that “commerce” is too broad would be
inconsistent with binding supreme court precedent. PhRMA thus has failed to meet the
“extraordinary burden” required to overcome the presumption of constitutional validity,
Otto, 910 N.W.2d at 459, and section 62J.96 does not violate the Single Subject Clause.
2. Title Clause
The function of the title requirement is to provide notice of the interests likely to be
affected by the law and “to prevent surprise and fraud upon the people and the legislature
by including provisions in a bill whose title gives no intimation of the nature of the
proposed legislation.” Wass, 252 N.W.2d at 134-35 (quotation omitted). “[T]he generality
18
of the title of an act is not grounds for invalidation as long as the title gives notice of the
general subject because the title was never intended to be an index of the law.” Assoc.
Builders, 610 N.W.2d at 300 (quotation omitted). “It is not essential that the best or even
an accurate title be employed, if it be suggestive in any sense of the legislative purpose.”
Wass, 252 N.W.2d at 137 (quotation omitted). Every reasonable presumption should be in
favor of the title’s constitutionality. Id.
PhRMA argues that nothing in the title of H.F. 4757 relates to sections 62J.96 or
340B, that “commerce” is far too broad, and that “consumer protection” does not accurately
describe the statute because it benefits only commercial entities like covered entities and
contract pharmacies, not patients. But generality is not grounds for invalidation, and the
title need not be perfect or an index of the law. Wass, 252 N.W.2d at 137; Assoc. Builders,
610 N.W.2d at 300. While “commerce” and “consumer protection” may be general, neither
is misleading. See Wass, 252 N.W.2d at 137 (“‘Transportation’ is a general term. But no
legislator could be misled by it.”). Regulating the delivery of goods within a commerce
bill is not a “surprise” or “fraud.” Otto, 910 N.W.2d at 456. And a statute designed to
prevent interference with the distribution of drugs to underserved patients is not so far
afield of “consumer protection” as to be misleading.
Accordingly, section 62J.96 also does not violate the Title Clause, and the district
court did not err in granting the state’s motion to dismiss PhRMA’s claim that the statute
violates the Minnesota Constitution.
19
B. PhRMA has not pleaded a viable claim that section 62J.96 is preempted
by federal law.

PhRMA’s second claim is based on its allegations that section 62J.96 is preempted
by federal law. To support this claim, PhRMA makes two distinct arguments, contending
that (1) section 62J.96 is in direct conflict with the federal scheme because it operates as
more than a mere regulation of delivery obligations in two ways: first, it “impermissibly
regulates 340B pricing” by setting or enforcing discount pricing and, second, it “expand[s]
the federal subsidy” by requiring manufacturers to provide 340B pricing discounts to
contract pharmacies; and (2) section 62J.96 “conflicts with and intrudes on 340B’s
exclusive federal administration and enforcement regime.” Based on these arguments,
PhRMA asserts that section 62J.96 fails under two different theories of preemption:
conflict preemption and field preemption. We consider whether PhRMA’s preemption
claim under either theory survives a motion to dismiss and conclude that it does not. To
facilitate that analysis, however, we lead with a discussion of the presumption against
preemption and of statutes and federal caselaw that are relevant to the question of
preemption.
Presumption Against Preemption
Article VI of the United States Constitution provides that the laws of the United
States “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. “The preemption
of state law may operate impliedly . . . because a federal statute conflicts with a state statute
20
or because the scope of a federal statute indicates that Congress intended federal law to
occupy a field exclusively.” Surcharge Appeals, 867 N.W.2d at 517 (quotations omitted).3
But the United States Supreme Court has explained that “[c]onsideration of issues
arising under the Supremacy Clause ‘start[s] with the assumption that the historic police
powers of the States [are] not to be superseded by Federal Act unless that [is] the clear and
manifest purpose of Congress.’” Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992)
(quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)). “Preemption of state
law is not favored ‘in the absence of persuasive reasons—either that the nature of the
regulated subject matter permits no other conclusion or that the Congress has unmistakably
so ordained.’” Blackburn v. Doubleday Broad. Co., 353 N.W.2d 550, 554 (Minn. 1984)
(quoting Fla. Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142 (1963)).
“Health and safety” is an area of state law that is “traditionally included within a
state’s police power,” and accordingly, the party alleging preemption bears “the
considerable burden of overcoming” the presumption that Congress does not intend to
preempt the state law. Surcharge Appeals, 883 N.W.2d at 786 (citing De Buono v.
NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S. 806, 814 (1997)). S tate regulation of
the business of pharmacy “under the police power cannot well be questioned.” State v.
Hovorka, 110 N.W. 870, 871 (Minn. 1907). And Minnesota has long recognized the
“relationship between the sale of drugs and the public health” and that the state can “validly
exercise its police power by a statute regulating such sales.” State v. Red Owl Stores, Inc.,

3 Though PhRMA does not allege it here, Congress may also expressly preempt certain
state laws by stating so in express terms. Id.
21
115 N.W.2d 643, 658 (Minn. 1962). Accordingly, we apply the presumption against
preemption here.
Statutes and Relevant Federal Caselaw
Next, we must recall the statutory framework of the 340B program to evaluate its
breadth and its intersections, if any, with section 62J.96. Section 340B requires
manufacturers to “offer each covered entity covered outpatient drugs for purchase” at or
below a specified ceiling price. 42 U.S.C. § 256b(a)(1). We recognize that the
“340B program ‘has three basic parts: (1) a cap on drug makers’ prices, (2) restrictions on
covered entities, and (3) compliance mechanisms for both covered entities and
manufacturers.’” McClain, 95 F.4th at 1141 (quoting Sanofi, 58 F.4th at 699). When
disputes over payment, pricing, diversion, or discounts arise between manufacturers and
covered entities, section 340B mandates that parties engage in HHS’s dispute-resolution
process to resolve the issue. 42 U.S.C. § 256b(d)(3) (2018). Congress made HHS the sole
enforcer of 340B. See Astra, 563 U.S. at 120.
On the other hand, section 62J.96 prohibits manufacturers from interfering “with
the delivery of a covered outpatient drug to a pharmacy that is under contract with a
340B covered entity to receive and dispense covered outpatient drugs on behalf of the
covered entity.” Minn. Stat. § 62J.96, subd. 1. But section 62J.96 says nothing about price
and does not require manufacturers to provide 340B drugs to contract pharmacies at the
340B price. Pharmacies are not covered entities and are not eligible to receive the
340B price. See 42 U.S.C. § 256b(a)(4) (defining “covered entity”). Section 62J.96, by
its plain language, makes clear that pharmacies under contract with a 340B covered entity
22
may receive and dispense covered drugs “on behalf of the covered entity.” Minn. Stat.
§ 62J.96, subd. 1. But it is the covered entity that pays the 340B price, and the statute
merely prevents manufacturers from interfering with the contract pharmacy’s dispensing
of the drugs to the covered entity’s patients. By its plain language, section 62J.96 does not
attempt to enforce or impose penalties for violations of 340B. And section 62J.96 does not
give the state any jurisdiction over payment, pricing, diversion, or discount disputes
between manufacturers and covered entities.
Given the disagreements about aspects of the 340B program, there are a number of
significant cases to which the parties cite as persuasive authority. PhRMA cites two federal
appellate opinions— Sanofi and Novartis. In these cases, the Third Circuit in 2023 and the
D.C. Circuit in 2024 addressed HHS advisory opinion 20-06 and subsequent HRSA
enforcement letters in which the agency interpreted section 340B to require drug
manufacturers to deliver 340B drugs to an unlimited number of contract pharmacies and
opined that manufacturer policies that limit delivery to contract pharmacies are unlawful.
Sanofi, 58 F.4th at 701-03; Novartis, 102F.4th at 458-59.
In conducting statutory interpretation of section 340B, the court in Novartis reached
the same conclusion for the same reasons as the court in Sanofi. Novartis, 102 F. 4th at
461. Both courts held that section 340B is silent regarding delivery and thus that HHS’s
reading of section 340B as requiring delivery to an unlimited number of contract
pharmacies was incorrect. Sanofi, 58 F.4th at 703-07 ( stating that “[l]egal duties do not
spring from silence”); Novartis, 102 F.4th at 460-61 (stating “we agree entirely” with the
reasoning and conclusion in Sanofi that, “because section 340B is silent about delivery,
23
HRSA erred in concluding that the statute requires drug makers to deliver drugs to an
unlimited number of contract pharmacies” (quotation omitted)). In Novartis, the D.C.
Circuit interpreted the language of 340B in terms of the contractual relationship it requires
between manufacturers and covered entities and explained that the statutory silence of
section 340B on delivery preserves the ability of manufacturers to impose “at least some
delivery conditions.” 102 F.4th at 460.
In addition to the federal appellate opinions addressing challenges to HHS’s
interpretation of section 340B, two federal courts of appeal recently have addressed drug
manufacturers’ challenges to state laws similar to section 62J.96 that prohibit restrictions
by manufacturers on, among other things, delivery of 340B drugs. The state cites these
cases, in which the drug manufacturers asserted, in part, that state laws were preempted by
federal law, but the courts, applying the presumption against preemption, upheld the state
laws after determining that the federal drug-pricing program—the 340B program —did not
preempt the state laws under theories of field or conflict preemption. See McClain,
95 F.4th at 1143 (holding that Arkansas law prohibiting drug manufacturers from limiting
covered entities’ ability to contract with outside pharmacies was not preempted by 340B
statutory scheme under either a conflict or field preemption theory); AbbVie, Inc. v. Fitch ,
152 F.4th 635, 645 (5th Cir. 2025) (affirming denial of injunctive relief to drug
24
manufacturers challenging Mississippi law prohibiting interference with acquisition or
delivery of a 340B drug to a contract pharmacy and rejecting preemption claims). 4,5
Against this backdrop, we consider PhRMA’s arguments on preemption as to
section 62J.96.
1. Conflict Preemption
Conflict preemption may arise in two ways. First, it may exist if a party cannot
simultaneously comply with both state and federal law. In re Est. of Barg, 752 N.W.2d 52,
64 (Minn. 2008) (citing Fla. Lime & Avocado Growers, Inc., 373 U.S. at 142-43). Second,
it may exist when the state law is an obstacle to the accomplishment of Congress’s purpose
and objectives. Id. Because PhRMA argues conflict preemption only on the basis that
section 62J.96 is an obstacle to the accomplishment of Congress’s purpose and objectives
in establishing the 340B program,
6 our inquiry is focused there.

4 Some federal district courts have come to the opposite conclusion. AbbVie Inc. v.
Drummond, No. 25- CV-726 (W.D. Okla. Oct. 31, 2025), AbbVie, Inc. v. Weiser,
No. 25-CV-1847-WJM KAS, 2025 WL 3041825, at *1 (D. Colo. Oct. 31, 2025); Pharm.
Rsch. & Mfrs. of Am. v. Morrisey, 760 F. Supp. 3d 439, 448 (S.D. W. Va. 2024). We
acknowledge that a circuit split may arise later on this issue but find persuasive that one
does not exist now.

5 We observe that as recently as this past week, the Fifth Circuit decided AbbVie, Inc. v.
Murrill, ___ F.4th___, ___, No. 24-30645, slip op. at 13-16 (5th Cir. Feb. 9, 2026), in
which it relied on its preemption analysis in Fitch, 152 F.4th at 646-48, to conclude that a
Louisiana law prohibiting manufacturers from interfering with delivery of 340B drugs to
contract pharmacies was not preempted by federal law.

6 We note that PhRMA does not allege that it cannot comply with both federal law and
state law simultaneously, and we interpret its brief to assert only that section 62J.96
presents an obstacle to the 340B program.
25
PhRMA argues that section 62J.96 conflicts with the 340B scheme by compelling
manufacturers to provide 340B-priced drugs to contract pharmacies in circumstances
where federal law does not. We understand PhRMA’s argument to be that section 62J.96
operates in a manner determined by the D.C. Circuit in Novartis to be in conflict with
section 340B, insofar as the text of section 340B does not support any requirement that a
manufacturer deliver to an unlimited number of contract pharmacies and that a state law
including such a requirement impermissibly conflicts with section 340B. We disagree with
the premise upon which PhRMA’s argument relies —that section 62J.96 compels drug
manufacturers to offer 340B-priced drugs to contract pharmacies.
The opinion in Novartis, addressing HHS’s advisory opinion 20-06, held that the
text of section 340B does not support the proposition that manufacturers are categorically
prohibited from imposing conditions on the distribution of 340B drugs to covered entities.
102 F.4th at 464. The D.C. Circuit explained that the statutory silence of section 340B on
delivery preserves the ability of manufacturers to impose “at least some delivery
conditions.” Id. at 460. But Novartis did not hold that a state law restriction on
manufacturer delivery to contract pharmacies created a pricing mandate. Indeed, Novartis
did not address state law at all. We cannot read Novartis as implying that because 340B
does not affirmatively prohibit manufacturers from imposing conditions on distribution, it
must mean that states are prohibited from imposing such conditions.
And while PhRMA argues that section 62J.96 alters the bargain that Congress struck
with manufacturers in creating the 340B scheme, it does not. A manufacturer participating
in the 340B program must agree to “offer” each covered entity their drugs at the ceiling
26
price. 42 U.S.C. § 256b(a)(1). Section 62J.96 does not change the 340B obligation; a
manufacturer is still required to offer the drugs at the 340B price. A manufacturer is still
free to choose not to opt in to the program. See Astra, 563 U.S. at 115 (referring to the
340B program creating an “opt-in mechanism” for manufacturers).
PhRMA makes the same arguments here that were rejected in McClain. 95 F. 4th
at 1143-45. In McClain, the Arkansas law at issue was similar to section 62J.96 in that it
addressed delivery to contract pharmacies. See id. at 1142-43. The state law authorized
the state insurance division to exact penalties and equitable relief if manufacturers denied
delivery to a covered entity’s contract pharmacy. Id. at 1144. The Eighth Circuit
determined that section 340B provided HHS with jurisdiction over all pricing-related
disputes and the state law merely addressed distribution to contract pharmacies. Id. It
therefore concluded that the Arkansas law “does not set or enforce discount pricing. As
such, the delivery of a covered entity’s 340B drugs to contract pharmacies for dispensing
creates no obstacle” and was not conflict preempted. Id. at 1145.
PhRMA asserts the McClain analysis is inapplicable because it was decided before
the decision in Novartis and that, because it did not apply the “offer” framework PhRMA
urges us to now apply, it is not persuasive. PhRMA fails to acknowledge, however, that
McClain was decided after Sanofi —in fact, it cites Sanofi numerous times, McClain,
95 F.4th at 1141-45; that the court in Novartis applied the same reasoning and reached the
same conclusion as the court in Sanofi, see Novartis, 102 F. 4th at 461 (stating “we agree
entirely” with the conclusion in Sanofi); and that both Sanofi and Novartis discussed the
meaning of “offer” in the language of section 340B, Sanofi, 58 F.4th at 703; Novartis,
27
102 F.4th at 460. For these reasons, we conclude that the analysis in McClain is not
inconsistent with the holding in Novartis.
We are also not persuaded that the mere existence of any effects of section 62J.96
on PhRMA’s members’ commercial transactions means that section 62J.96 is an obstacle
to section 340B. The purpose of section 340B is to increase access to medications for
entities that provide medical care to underserved populations. Becerra, 596 U.S. at 738.
Rather than creating an obstacle to 340B’s purpose, section 62J.96 complements it by
ensuring that more patients have adequate access to pharmacies that can dispense the 340B
drugs necessary for their healthcare. See McClain, 95 F.4th at 1144-45 (“Act 1103 does
not create an obstacle for pharmaceutical manufacturers to comply with 340B, rather it
does the opposite: Act 1103 assists in fulfilling the purpose of 340B.”).
In sum, we conclude that section 62J.96 does not compel manufacturers to provide
340B-priced drugs to contract pharmacies in circumstances where federal law does not,
and we conclude that it is not conflict preempted by federal law.
2. Field Preemption
PhRMA contends that “field preemption is also an appropriate lens through which
to evaluate [whether] section 62J.96” is preempted by federal law. Field preemption
applies when Congress “intend[s] ‘to foreclose any state regulation in the [regulated] area,’
irrespective of whether state law is consistent or inconsistent with ‘federal standards.’”
Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 377 (2015) (quoting Arizona v. United States, 567 U.S. 387, 401 (2012)). Congress’s intent to preempt a field “can be inferred from a
framework of regulation ‘so pervasive . . . that Congress left no room for the States to
28
supplement it’” or a “federal interest . . . so dominant that the federal system will be
assumed to preclude enforcement of state laws on the same subject.” Arizona, 567 U.S. at
399 (quoting Rice, 331 U.S. at 230). A reviewing court must determine whether the
congressional act “manifest[s] the intention to occupy the entire field” such that the only
logical inference left is that the state has no room to legislate the same subject. Kurns v.
R.R. Friction Prods. Corp., 565 U.S. 625, 631 (2012) (quotation omitted). Field
preemption “should not be inferred, however, simply because the agency’s regulations are
comprehensive.” R.J. Reynolds Tobacco Co. v. Durham County, 479 U.S. 130, 149 (1986).
PhRMA’s theory of field preemption is that the statutory scheme underlying the
340B program is “so pervasive . . . that Congress left no room for the States to supplement
it” and thus section 62J.96 violates the Supremacy Clause.
7 To support its argument and

7 Although PhRMA pointed out that a state law may be field preempted when there is a
“federal interest . . . so dominant that the federal system will be assumed to preclude
enforcement of state laws on the same subject,” Arizona, 567 U.S. at 399, it limits its
discussion of caselaw related to this argument to a footnote in which it relies on the concept
of a unique federal interest primarily to challenge whether the presumption against
preemption applies here, not to argue that the delivery of 340B drugs to contract
pharmacies presents a unique federal concern. The Supreme Court has held that certain
areas involving “uniquely federal interests” are “so committed by the Constitution and laws
of the United States to federal control that state law is preempted and replaced” by federal
common law. Boyle v. United Techs. Corp., 487 U.S. 500, 504 (1988). However, such a
uniquely federal interest has been found in only a few circumstances. Id. at 505 (collecting
prior cases on the civil liability of federal officials for actions taken in the course of duty),
506 (government contractor civil liability arising out of performance of federal
procurement contracts was a uniquely federal interest); United States v. Locke, 529 U.S.
89, 97, 99 (2000) (regulation of maritime vessels); Buckman Co. v. Plaintiffs’ Legal
Comm., 531 U.S. 341, 347 (2001) (state tort claims for fraud on a federal agency). We are
neither persuaded that we should not apply the presumption against preemption nor that a
unique federal interest exists that supports a determination that section 62J.96 is field
preempted here, where section 62J.96 regulates in the area of public health and pharmacy,
29
demonstrate the pervasive nature of the statutory scheme, PhRMA points to components
of the 340B program, including compliance mechanisms, penalties for noncompliance or
abuse by manufacturers and covered entities, and a dispute resolution process through
HHS.8 See, e.g. , Astra, 563 U.S. at 115-16 (explaining how the 340B program operates
and is enforced); Sanofi, 58 F.4th at 701-02 (same). When preemption is alleged, the
ultimate touchstone of our analysis is whether Congress’s “clear and manifest purpose”
was to supersede the historic police powers of the state. Cipollone, 505 U.S. at 516; Barg,
752 N.W.2d at 63 (stating that whether federal law preempts state law is primarily an issue
of statutory interpretation).
The opinion in McClain again provides useful guidance. The Eighth Circuit rejected
PhRMA’s field-preemption arguments, determining that, because HHS has jurisdiction
over disputes between covered entities and manufacturers, any dispute over delivery at the
state level is not an intrusion into HHS jurisdiction. McClain, 95 F.4th at 1143 -44. It
concluded that the Arkansas law was simply deterring manufacturers from interfering with

areas that within the state’s police power. See Surcharge Appeals, 883 N.W.2d at 786; Red
Owl Stores, Inc., 115 N.W.2d at 658.
Furthermore, establishing “an area of uniquely federal interest does not . . . end the
inquiry” because that is merely “a necessary, not a sufficient, condition for the
displacement of state law.” Boyle, 487 U.S. at 507. State law will only be displaced where
a “significant conflict exists between an identifiable federal policy or interest and the
operation of state law,” or when state law would frustrate “specific objectives of federal
legislation.” Id. (quotations omitted). And here, as we have observed, section 62J.96
furthers the objectives of the 340B program.

8 When disputes over payment, pricing, diversion, or discount arise between manufacturers
and covered entities, section 340B mandates that parties engage in HHS’s
dispute-resolution process to resolve the issue. 42 U.S.C. § 256b(d)(3).
30
a covered entity’s contract-pharmacy arrangements. Id. at 1145. And it also interpreted
“congressional silence on pharmacies in the context of 340B [as an indication] that
Congress did not intend to preempt the field.” Id. at 1144.
We find the reasoning in McClain persuasive. While the compliance mechanisms
in section 340B are comprehensive, section 62J.96 does not intrude on them. Section 340B
does not address disputes between manufacturers and pharmacies, and pharmacies are not
covered entities. Section 340B does not address delivery to pharmacies at all. We cannot
say this logically leads to the conclusion that Congress intended to occupy the entire field,
especially when section 340B is silent on the subject of pharmacies.
Although the statutory scheme of the 340B program, including compliance
mechanisms, penalties for noncompliance or abuse by manufacturers and covered entities,
and the HHS dispute
-resolution provision are comprehensive, they do not demonstrate such
a pervasive nature that Congress had as its “clear and manifest purpose” to supersede the
historic police powers of the states, including Minnesota. We therefore conclude that
section 62J.96 is not field preempted by federal law.
Because section 62J.96 is not preempted by federal law, the district court did not err
in granting the state’s motion to dismiss PhRMA’s claim based on preemption.
C. PhRMA has failed to plead a viable dormant Commerce Clause claim.

PhRMA alleges it has sufficiently pleaded a claim under what is known as the
“extraterritoriality doctrine” of the dormant Commerce Clause of the United States
Constitution because section 62J.96 seeks to operate wholly outside the state of Minnesota.
31
We first explain dormant Commerce Clause jurisprudence and then address each of
PhRMA’s specific allegations of how section 62J.96 violates the clause.
The Commerce Clause states that Congress may “regulate Commerce . . . among
the several States.” U.S. Const. art. I, § 8. The Supreme Court has long understood that
this affirmative grant of authority includes a “negative or dormant implication.” Gen.
Motors Corp. v. Tracy, 519 U.S. 278, 287 (1997).
While most dormant Commerce Clause jurisprudence focuses on whether the
challenged law discriminates against out-of-state interests or excessively burdens interstate
commerce, PhRMA makes a less-common argument under the extraterritoriality doctrine.
See Swanson v. Integrity Advance, LLC, 870 N.W.2d 90, 94 (Minn. 2015) (referring to the
extraterritoriality doctrine as “[a]n additional, related limitation on state regulation of
commerce”); In re Licensure of Griepentrog, 888 N.W.2d 478, 494, 495 (Minn. App. 2016)
(describing the extraterritoriality doctrine’s limited use in “rare cases” and observing that,
in analyzing these cases, courts employ a different test).
The extraterritoriality doctrine provides that states may not enact laws that control
commercial activity occurring wholly outside the boundary of a state. See Healy v. Beer
Inst., 491 U.S. 324, 337 (1989) (holding that a state statute was unlawful when it had the
“undeniable effect of controlling commercial activity occurring wholly outside the
boundary of the State”); see also Brown-Forman Distillers Corp. v. N.Y. State Liquor
Auth., 476 U.S. 573, 581-82 (1986) (citing Healy and determining the dormant Commerce
Clause was violated when a state statute required distillers to ensure their in-state prices
were no higher than their out-of-state prices). The focus is whether “the practical effect of
32
the regulation is to control conduct beyond the boundaries of the State.” Healy, 491 U.S.
at 336. To determine a statute’s “practical effect,” we must consider not only the effects
of the challenged statute itself, but also how it “may interact with the legitimate regulatory
regimes of other States and what effect would arise if not one, but many or every, State
adopted similar legislation.” Id.; see also Swanson, 870 N.W.2d at 94 (describing and
employing this test).
“The extraterritoriality doctrine applies only when its narrow parameters are met;
when a law, typically price regulation, controls commerce totally outside its borders.” 9
Griepentrog, 888 N.W.2d at 495 (recognizing that the Supreme Court has relied upon the
doctrine only in the context of price-control laws); see also Baldwin v. G.A.F. Seelig, Inc.,
294 U.S. 511, 521-22 (1935) (striking down act prohibiting dealer from selling, in the state,
milk produced out of the state, at less than minimum price fixed for similar milk produced
within the state).
PhRMA makes two main allegations under this doctrine. The first is that
section 62J.96 governs transactions between out-of-state manufacturers and out-of-state
pharmacies. PhRMA admits that, if section 62J.96 does not require manufacturers to
provide 340B-priced drugs to contract pharmacies located outside of Minnesota, it does

9 If a case does not fit into those narrow confines, the traditional Commerce Clause analysis
is appropriate. Swanson, 870 N.W.2d at 94. But PhRMA does not argue that the traditional
analysis—involving Pike v. Bruce Church, Inc.—applies. 397 U.S. 137, 142 (1970). Thus,
our analysis rests solely on the extraterritoriality doctrine.
33
not implicate the dormant Commerce Clause in this manner. At oral argument, the state
agreed that section 62J.96 does not apply to delivery to pharmacies in other states. 10
PhRMA’s second allegation is that section 62J.96 governs transactions between
out-of-state manufacturers and out-of-state distributors. Prior to the Supreme Court’s May
2023 decision in National Pork Producers Council v. Ross, 598 U.S. 356, some federal
appellate courts considered that laws that had the practical effect of controlling commerce
outside the state were almost per se invalid. See, e.g., North Dakota v. Heydinger, 825 F.3d
912, 919 (8th Cir. 2016); Int’l Dairy Foods Ass’n v. Boggs, 622 F.3d 628, 645 (6th Cir.
2010); All. of Auto. Mfrs. v. Gwadosky, 430 F.3d 30, 35 (1st Cir. 2005). In Pork Producers,
the Supreme Court expressly rejected an almost-per-se rule. 598 U.S. at 374-75. The
Supreme Court stated that it “has already described ‘[t]he rule that was applied in Baldwin
and Healy’ as addressing ‘price control or price affirmation statutes’ that tied ‘the price of
. . . in-state products to out-of-state prices.’” Id. at 374 (quoting Pharm. Rsch. & Mfrs. of
Am. v. Walsh, 538 U.S. 644, 669 (2003)). The challenged statutes in those cases “had a
specific impermissible extraterritorial effect —they deliberately prevent[ed out-of-state
firms] from undertaking competitive pricing or deprive[d] businesses and consumers in

10 The state contends that PhRMA’s entire dormant Commerce Clause argument fails due
to PhRMA’s concession on its first issue because PhRMA makes a “facial challenge” and,
therefore, it was required to show that section 62J.96 is unconstitutional in all applications.
The state did not argue to the district court that PhRMA’s arguments fail as a facial
challenge, and we decline to address that contention here. See Thiele v. Stich, 425 N.W.2d
580, 582 (Minn. 1988) (stating that appellate courts generally address only those questions
previously presented to and considered by the district court).
34
other States of whatever competitive advantages they may possess.” Id. (quotations
omitted).
PhRMA primarily relies on Association for Accessible Medicines v. Ellison .
140 F.4th 957 (8th Cir. 2025). Accessible Medicines determined that Pork Producers
preserved precedent “ that a state violates the extraterritoriality principle when it enacts
‘price control or price affirmation statutes that tie[] the price of in-state products to
out-of-state prices.’” Id. at 960 (quoting Pork Producers, 598 U.S. at 374). It further stated
the “classic observation that a state has no power to project its legislation into another state
by regulating the price to be paid in that state for drugs sold there remains good law.” Id.
(quotations omitted). Accordingly, the Eighth Circuit rejected the state’s argument that
Pork Producers created a presumption against dormant Commerce Clause challenges when
a law does not discriminate. Id. at 961.
We find the Eighth’s Circuit’s reasoning persuasive because, in Minnesota, before
the decision in Pork Producers, the extraterritoriality doctrine was understood as not
strictly requiring discrimination. See Swanson, 870 N.W.2d at 94 (referring to
extraterritoriality as “[a]n additional, related limitation” where the party does not argue that
a law is discriminatory or that it excessively burdens interstate commerce); Griepentrog,
888 N.W.2d at 494 (explaining extraterritoriality as a “discrete subset” of cases without
reference to discrimination).
Accessible Medicines determined that a Minnesota law violated the
extraterritoriality doctrine when it prohibited manufacturers from “impos[ing], or caus[ing]
to be imposed, an excessive price increase . . . on the sale of any generic or off-patent drug
35
sold, dispensed, or delivered to any consumer in the state.” 140 F.4th at 959; see Minn.
Stat. § 62J.842, subd. 1 (2024). On this point, Accessible Medicines is distinguishable.
Accessible Medicines addressed a law that directly controlled the price of any generic or
off-patent drug sold to any consumer in the state. Section 62J.96 has no such mandate and
does not address price at all. The price of the drugs and the consumers eligible to receive
the 340B drugs are still controlled by federal law under section 340B.11
Section 62J.96 does not control the price of manufacturer -to-distributor sales
occurring outside of Minnesota. Federal law under section 340B controls the price of
manufacturer sales both in and outside of Minnesota. Section 62J.96 merely prevents a
manufacturer from interfering with the delivery of drugs at the 340B price to Minnesota
contract pharmacies. Accordingly, the district court did not err in dismissing PhRMA’s
dormant Commerce Clause claim.
Because no facts that could be introduced consistent with the pleading would
support granting the relief demanded, we conclude that PhRMA’s complaint did not set
forth a legally sufficient claim for relief as to any of its three claims. Thus, the district
court did not err in dismissing PhRMA’s claims.
Affirmed.

11 The effect of the extraterritoriality doctrine on 340B state “delivery” laws has not yet
been addressed by federal courts of appeals.