AMCP Files Amicus Brief in US Supreme Court Case Challenging PBMs

The Academy of Managed Care Pharmacy (AMCP) has filed an amicus brief in the United States Supreme Court case Rutledge v. The Pharmaceutical Care Management Association (PCMA), arguing that a ruling in favor of Rutledge would drive up health care costs, and hinder patients’ health outcomes and ability to access affordable medications. The case is scheduled to be heard April 27, 2020.¹

Rutledge v. PCMA centers on a 2015 Arkansas law that aims to regulate how pharmacy benefit managers (PBMs) contract with pharmacies under health plans governed by the Employee Retirement Income Security Act (ERISA).¹

“Pharmaceuticals play an increasingly important role in the prevention, cure, and management of disease. An essential component of ERISA-governed health benefit plans, therefore, is the ability of plan beneficiaries to acquire clinically appropriate medication to treat their medical needs. At the same time, however, expenditures for drugs have been increasing at rates higher than or comparable to expenditures for other health-related products and services,” the brief stated.²

In the brief, AMCP argues that the federal ERISA, which sets minimum standards for most voluntarily established retirement and health plans in private industry, preempts the Arkansas law.^1-3 Passed in 2015, Arkansas Act 900 required PBMs to raise reimbursement rates for drugs if they fell below the pharmacy’s wholesale costs and created an appeal process for pharmacies to challenge PBM reimbursement rates. This effectively prohibited PBMs from reimbursing pharmacies below the pharmacies’ cost of acquisition.

The US Court of Appeals for the Eighth Circuit, covering Arkansas and 6 other states, previously ruled on Rutledge v. PCMA. The Eighth Circuit decision favored the PCMA, ruling that ERISA, a federal law that sets minimum standards for voluntarily established retirement and health plans in private industry, superseded an Arkansas law that sought to regulate PBMs.⁴

In a response to a previous brief filed by PCMA, an association that represents PBMs, the National Community Pharmacists Association, the American Pharmacists Association (APhA), and the Arkansas Pharmacists Association stated that they contend that PBMs are hiding behind the “false argument that ERISA exempts them from reasonable regulation by states,” according to the press release.⁵

“Regulating PBMs is vital to preserving the benefits that pharmacists are valued for—helping patients make the most of their medications, avoiding preventable illnesses, managing chronic diseases, and keeping them out of the hospital. Patients need access to their pharmacists. Without fair regulation, the future of accessibility to pharmacists is in jeopardy,” said Thomas E. Menighan, BSPharm, MBA, ScD (Hon), FAPhA, executive vice president and CEO of APhA, in a statement.⁶

In the association’s press release, AMCP argues that a ruling in favor of Rutledge could introduce varying, and perhaps contradictory, state laws that would restrict using evidence-based practices to promote optimal medication use and enhance population health outcomes.

“Such a ruling also would make the health care system more complex, creating additional financial burdens that would likely be passed along to consumers through higher premiums,” AMCP said in a press release.¹

“The uniformity and predictability of pharmacy benefit regulation that ERISA provides is critical to the development and implementation of such managed care pharmacy strategies. State regulations that dictate how pharmacy benefit plans are to be administered undercut the ability of managed care pharmacy professionals both to develop and to deploy these clinically beneficial and cost-saving measures,” the brief stated.²

"The proliferation of 50 varying state regulations would further fracture our health care system, making it challenging if not impossible for managed care professionals to efficiently apply proven tools and practices, such as formulary management, that provide millions of patients the best possible benefits for their prescribed medications at the lowest possible costs," said Susan A. Cantrell, RPh, CAE, CEO of AMCP, in the release.¹

Reference

• AMCP Files Amicus Brief with U.S. Supreme Court Case on Rutledge v. PCMA [news release]. AMCP website. Published April 1, 2020. https://www.amcp.org/About/Media/Press-Releases/amcp-files-amicus-brief-rutledge-v-pcma. Accessed April 6, 2020.
• Amicus brief of Academy of Managed Care Pharmacy submitted. Scotus Blog. Published April 1, 2020. https://www.scotusblog.com/case-files/cases/rutledge-v-pharmaceutical-care-management-association/. Accessed April 6, 2020.
• ERISA. US Department of Labor. https://www.dol.gov/general/topic/health-plans/erisa. Accessed April 6, 2020.
• Analysis: SCOTUS Could Open the Door for States to Regulate PBMS. NCPA website. http://www.ncpa.co/pdf/analysis-scotus-states-pbms.pdf. Accessed January 10, 2020.
• APhA and other groups respond to PCMA brief in PBM Supreme Court case [news release]. APhA website. Published March 25, 2020. https://www.pharmacist.com/article/apha-and-other-groups-respond-pcma-brief-pbm-supreme-court-case. Accessed April 6, 2020.
• Community Pharmacists Respond to PCMA’s Amicus Brief on States' Authority to Regulate PBMs [news release]. NCPA website. Published March 25, 2020. https://ncpa.org/newsroom/news-releases/2020/03/25/community-pharmacists-respond-pcmas-amicus-brief-states-authority. Accessed April 6, 2020.