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March 03, 2023

Washington Court of Appeals Holds That PBMs Cannot Contract Around State Reimbursement Requirements

On February 21, 2023, Prime Therapeutics—a pharmacy benefit manager (PBM)—lost its appeal to the Washington Court of Appeals to overturn state statutory requirements that set forth reimbursement standards for PBMs and internal and external appeals processes for pharmacies. Prime Therapeutics had argued that its reimbursement rates were contractual and should be enforced without state interference. The Court of Appeals disagreed, holding that a contractual reimbursement rate lower than a pharmacy’s costs is subject to legislation enacted to protect struggling pharmacies. The court emphasized that “the statute serves the legitimate public purpose of maintaining access to pharmacies in rural and underserved communities.”

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