Oral arguments in U.S. Supreme Court PBM case get a new date

After a pandemic-related delay, we know now when Rutledge v. Pharmaceutical Care Management Association (PCMA) will have its day in court. Oral arguments in the case will be heard on October 6, 2020. Rulings typically come several months after oral arguments. It is still unknown whether arguments will be held in person or virtually.

The case was filed by Arkansas Attorney General (AG) Leslie Rutledge. PCMA is the professional association that represents PBMs.

“This case is one of the most impactful health care cases at the Supreme Court in a decade. That’s why the U.S. Solicitor General encouraged the Court to take this case,” AG Rutledge told Pharmacy Today in April 2020. “The case will give clarity that would allow states to implement their PBM regulations or put some in place. This is to protect the American consumer—to protect patients—and make sure that they have access to quality health care and that they are able to continue to use their own pharmacist of choice.”

APhA, along with the National Community Pharmacists Association, the Arkansas Pharmacists Association, and the National Alliance of State Pharmacy Associations, filed an amicus curiae brief in the case. Pharmacy associations from almost every state and the District of Columbia signed on to the brief, which supports states’ right to regulate PBMs.

After an investigation, Rutledge concluded that PBMs were in violation of Act 900, an Arkansas statute which effectively bans PBMs from reimbursing pharmacies below the pharmacies’ cost to acquire the medication. Below-cost reimbursement was forcing pharmacies across the state to close. PCMA claims that the Arkansas statute mandating that PBMs cannot reimburse pharmacies less than the drug cost is preempted by federal law.

In an ensuing lawsuit, U.S. District Court Judge Brian Miller ruled partly in favor of Arkansas by rejecting the argument that the Act was preempted by Medicare Part D. His decision did exempt from Act 900 regulation of the reimbursement rate for plans governed by ERISA—a win for PBMs.

PCMA appealed. The Eighth Circuit Court of Appeals sided with the PBM lobby, blocking Arkansas from enforcing Act 900. The Circuit Court ruled that ERISA, a federal law governing the administration of employee benefits, preempts the state from restricting controversial business practices that destroy local pharmacies. The U.S. Solicitor General subsequently filed a brief with SCOTUS that disagreed with the Eighth Circuit’s decision. SCOTUS announced its decision to hear the case on Friday, January 10.

To learn more about the case, what the outcome of the case means for all U.S. states, and an explanation of ERISA, the federal law in question, read this April 2020 Pharmacy Today story.