January 23, 2020

Supreme Court to Hear PBM state regulation challenge

The U.S. Supreme Court has agreed to hear oral argument in a case related to state regulation of Pharmacy Benefit Managers’ (PBM) rates. The Court granted Cert in the case of Rutledge v Pharmaceutical Care Management Association where the 8th Circuit held the efforts of Arkansas to regulate the rates and reimbursement of PBM’s was preempted by ERISA. Leslie Rutledge, the Arkansas Attorney General argues that since the Supreme Court has previously ruled that ERISA does not preempt rate regulation, the 8th Cir opinion that ERISA preempted these state laws appears to be in conflict with prior precedent.  The Pharmaceutical Care Management Association issued a statement that "[t]hese inconsistent and often conflicting state policies eliminate flexibility for plan sponsors and create significant administrative inefficiencies. These inefficiencies divert funds from where they should be spent: providing access to health care services on which employees of plans across the country rely.