APhA, pharmacy groups file amicus brief in PBM Supreme Court case

APhA, along with the National Community Pharmacists Association (NCPA), the Arkansas Pharmacists Association (APA), and the National Alliance of State Pharmacy Associations (NASPA), filed an amicus curiae brief with the U.S. Supreme Court in the Rutledge v Pharmaceutical Care Management Association (PCMA) case. Oral arguments in the case begin on April 27, 2020, with a ruling typically coming several months later. Access the brief at https://apha.us/AmicusBrief.

Pharmacy associations from almost every state and the District of Columbia have signed on to the brief, which supports states’ right to regulate PBMs. PCMA, the association that represents PBMs, claim that Act 900, an Arkansas statute mandating that PBMs cannot reimburse pharmacies less than the drug cost, is preempted by federal law.

“We believe in our arguing that Act 900 is not preempted by ERISA [the Employee Retirement Income Security Act of 1974] because ERISA doesn’t preempt rate regulations,” Arkansas Attorney General Leslie Rutledge told Pharmacy Today. “Our statute is a basic rate regulation simply requiring that PBMs set reimbursement rates at a realistic cost for acquiring a drug.” Lower courts have been split on the issue.

In their brief, 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 one or more pharmacies to having none.”

“Currently, unregulated PBM business practices limit access to pharmacists’ care and thus, to optimal use of medicines by the American public,” said APhA Executive Vice President and CEO Thomas E. Menighan, BSPharm, MBA, ScD (Hon), FAPhA. “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.”

“Amicus curiae” literally translates to “friend of the court” and refers to legal briefs submitted by entities who are not party to the case at hand—none of the groups that have signed on to the brief will have any direct role in arguing the case. But, at the discretion of the Court, the justices can review amicus briefs to get more insight and expert opinion that could have bearing on the case.

PBMs have argued for years that they are exempt from state regulation because of vague language in ERISA. The law precludes states from regulating employee benefit plans, the pharmacy groups that have signed onto the amicus brief say, but not third-party vendors hired by the plans.

“When plans enter the market to purchase the goods and services they provide beneficiaries—or anything else they require to function—they are not immune from ordinary market regulation,” the groups say in the brief.

APhA and other pharmacy groups will host a rally on the steps of the Supreme Court on April 27, the day oral arguments begin.