A group of 32 state attorneys general filed an amicus brief on Tuesday, June 11, urging the Supreme Court to review a Tenth Circuit decision which held that federal law—specifically ERISA and Medicare Part D—preempted sections of an Oklahoma state law regulating pharmacy benefit managers (“PBMs”), and that those sections were therefore unenforceable.
PBMs act as intermediaries in the health care system—they manage prescription drug benefits, including by negotiating discounts, rebates and fees with drug manufacturers, creating drug formularies (lists of medications that are covered by insurance) and policies, and reimbursing pharmacies for drugs covered by prescription-drug plans. In their amicus brief, the attorneys general argue that states should be allowed to regulate PBMs. The attorneys general argue that PBMs have become too powerful, have contributed to higher drug costs, and have devastated independent pharmacies, which disproportionately serve minority populations.
A Supreme Court decision could provide guidance to states (all 50 states have laws regulating PBMs to some degree) concerning the limits of state regulation of PBMs. Recognizing the importance of a potential decision, multiple pharmacy-related associations have joined the attorneys general in filing amicus briefs in support of state regulation of PBMs (including one filed by Duane Morris on behalf of the National Association of Specialty Pharmacy). Their briefs echo the attorneys general’s brief in addressing the market impact of PBMs and their impact on vulnerable communities.