Pharmacist Groups Support Supreme Court PBM Case

February 24, 2020

Several pharmacy groups said they will file a brief in the Supreme Court case, Rutledge v. the Pharmaceutical Care Management Association.

This article has been updated to include comments from the Pharmaceutical Care Management Association. 

Several pharmacy groups said they will file a brief in the Supreme Court case, Rutledge v. the Pharmaceutical Care Management Association (PCMA).

NCPA, APhA, the Arkansas Pharmacists Association (APA), and National Alliance of State Pharmacy Associations (NASPA) will file an amicus curiae brief with the Supreme Court against PCMA.

The case, which will be heard on April 27, originates from Arkansas, which passed a law in 2015 barring pharmacy benefit managers (PBMs) from reimbursing local pharmacies at a lower rate than what the pharmacies pay to fill the prescriptions, NCPA said in a press release.1

However, PCMA challenged the law, so the APA and NCPA “joined the effort to ensure the 2015 precedent stands,” NCPA said.

“The PBMs have been hiding behind a vaguely worded section of a federal law that was never supposed to apply to them,” said B. Douglas Hoey, RPh, CEO of NCPA. “They operate without meaningful regulation, and because of that they’re able to stack the deck in their favor, and at the expense of community pharmacies and their patients.”

“This US Supreme Court will address regulation of an industry built for profits, not patients. The ever-increasing flow of health care funding to the proverbial unregulated middle can be halted, and good patient care can be enhanced when states are permitted to regulate PBMs,” said APhA Executive Vice President and CEO Thomas E. Menighan, BSPharm.

"As the process begins, we are confident in the merits of our arguements in this case and look forward to presenting them before the US Supreme Court," PCMA President and CEO JC Scott said in a released statement on the brief.2 "We believe everyone deserves access to quality, affordable health care services, no matter the state one lives in. Unique state laws governing the administration of pharmacy benefits are proliferating across the country, establishing vastly different standards. These inconsistent and often conflicting state policies eliminate flexibility for plan sponsors and create significant and costly administrative inefficiences. This will result in increased premiums and prescription drug costs for patients and payers."

At the heart of the case is whether states like Arkansas can enact regulations that affect the PBMs, who argue that they are exempt by the Employee Retirement Income Security Act (ERISA) of 1974, NCPA said.

"The Employment Retirement Income Security Act has long enabled employers to provide consistent, nationwide health care benefits due to its preemption of state laws," Scott said in the statement. "Federal preemption is a vitally important issue to ensuring high quality health care for patients."

Rebecca Snead, CEO and executive vice president of NASPA, said the federal ERISA law was never meant to shield PBMs from state regulation.

“State pharmacy associations have championed pro-patient, pro-employer, pro-pharmacy legislation for over 25 years with limited success due to the PBMs’ claims that they are pre-empted under ERISA. But the federal ERISA law was never intended to thwart states’ attempts to regulate the business of PBMs or the business of insurance,” Snead said.

 

References:

1. Pharmacy Groups Unite to Fight PBMs in Landmark Supreme Court Case [news release]. NCPA’s website. https://www.ncpanet.org/newsroom/news-releases/2020/02/21/pharmacy-groups-unite-to-fight-pbms-in-landmark-supreme-court-case.

2. PCMA Statement on the Brief Submitted by the State of Arkansas in the United States Supreme Court Rutledge V. PCMA [press release]. PCMA's website. https://www.pcmanet.org/pcma-statement-on-the-brief-submitted-by-the-state-of-arkansas-in-the-united-states-supreme-court-rutledge-v-pcma/. Accessed February 25, 2020.