North Dakota is being sued over a new law that requires drug manufacturers to sell more of their medications at a discount.

House Bill 1473, signed by Gov. Kelly Armstrong in April, primarily affects drug companies participating in a federal program called 340B.

A drug manufacturer has filed suit over the policy in North Dakota federal court, claiming it is unconstitutional and will hurt its profits. The state denies the company’s claims.

The 340B program was created by Congress in 1992 to improve health care access in low-income communities. It requires participating drug companies to offer discounted products to qualifying hospitals and other medical facilities. Drug companies must take part in 340B in order to participate in federal Medicaid and Medicare programs.

In legislative hearings, proponents of the bill called 340B a critical program for rural North Dakota, subsidizing medication for patients and allowing hospitals to provide a wider range of services.