4 Pharmacy Groups Document Support in Supreme Court Case Seeking to Limit PBMs

In support of states’ rights to regulate pharmacy benefit managers (PBMs), 4 professional pharmacy organizations filed an amicus brief on March 2, 2020, in federal court.¹

The American Pharmacists Association (APhA), the Arkansas Pharmacists Association, the National Alliance of State Pharmacy Associations (NASPA), and the National Community Pharmacists Association (NCPA) took the action for the Supreme Court case [Arkansas Attorney General Leslie] Rutledge v. the Pharmaceutical Care Management Association, scheduled to be heard in Washington, DC, on April 27, 2020. ¹

B. Douglas Hoey, chief executive officer of the NCPA, said that the brief argues that the states have an obligation and legal authority under federal law to protect local businesses and their patients. ¹

“PBMs increased fees on pharmacies by 45,000% simply because they can. They steer patients to their own pharmacies simply because they can,” Hoey said in a statement.¹

“They increase out-of-pocket costs for patients simply because they can. They hold pharmacies hostage to inflexible, 1-sided contracts simply because they can,” Hoey said.¹

“They behave like monopolies simply because they can. It’s time to say to the PBMs, ‘No, you can’t,’” Hoey said.¹

In addition to the 4 national pharmacist associations, pharmacy associations from nearly every state, as well as the District of Columbia, have signed on to the brief in a show of support.¹

In the document, the groups argue that “PBMs’ below-cost reimbursements have left marks on the pharmacy industry, particularly on independent rural pharmacies. In the last 15 years, 16.1% of independently owned rural pharmacies have closed, and 630 rural communities went from having 1 or more pharmacies to having none.” ¹

Rutledge filed a brief February 25, 2020, that requested that the Supreme Court reverse the US Court of Appeals for the Eighth District’s earlier decision to maintain that Arkansas’ statute regulating PBMs’ drug-reimbursement rates is preempted by the Employee Retirement Income Security Act of 1974 (ERISA).²

ERISA precludes states from regulating employee benefit plans but not third-party vendors hired by the plans, according to the pharmacy organizations, according to the document.²

“When every state pharmacy association across the country unites to say, ‘This is a problem in our state,’ you know it’s important issue. PBMs should not be able to hide behind ERISA to avoid state regulation,” said Rebecca Snead, chief executive officer and executive vice president of the NASPA.¹

In response to Rutledge’s brief, the Pharmaceutical Care Management Association (PCMA) issued a public statement that said the group was confident in the merits of its arguments in the case. ³

“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,” according to the statement.

“These inconsistent and often conflicting state policies eliminate flexibility for plan sponsors and create significant and costly administrative inefficiencies. This will result in increased premiums and prescription drug costs for patients and payers,” the PCMA statement said in the statement. ³

“The ERISA has long enabled employers to provide consistent, nationwide health care benefits due to its preemption of state laws. Federal preemption is a vitally important issue to ensuring high quality health care for patients,” the PCMA added.³

Unregulated PBM business practices limit access to pharmacists’ care and optimal use of medications, according to Thomas E. Menighan, BSPharm, MBA, ScD (Hon), FAPhA, executive vice president of the APhA.¹

“This is a matter of critical importance to the health and well-being of the American people,” he said in a statement.¹ “A Supreme Court ruling in favor of Arkansas’ oversight of PBMs would ensure patients of fairness, transparency and access to a readily available, knowledgeable health care provider: their pharmacist.”

REFERENCES

• National Community Pharmacists Association. Pharmacy Groups File Amicus Brief Supporting State Level PBM Regulation [news release]. Alexandria, VA; March 2, 2020: NCPA website. https://www.ncpanet.org/newsroom/news-releases/2020/03/02/pharmacy-groups-file-amicus-brief-supporting-state-level-pbm-regulation Accessed March 2, 2020.
• Brief for Petitioner. Rutledge v. Pharmaceutical Care Management Association. www.arkansasag.gov/site/assets/files/90135/2_24_20_pbm_brief.pdf. Filed February 24, 2020. Accessed March 2, 2020.
• PCMA statement on the brief submitted by the State of Arkansas in the United States Supreme Court Rutledge v. PCMA [news release]. Washington, DC; February 25, 2020: Pharmaceutical Care Management Association website. pcmanet.org/pcma-statement-on-the-brief-submitted-by-the-state-of-arkansas-in-the-united-states-supreme-court-rutledge-v-pcma/. Accessed March 3, 2020.