The U.S. Supreme Court on Thursday handed down a historic decision allowing states to regulate PBMs. In an 8-0 decision (Justice Amy Coney Barrett did not participate), the Court made possible what NCPA and our state partners have been working toward for more than a decade.
Community pharmacy owes special thanks to Arkansas Attorney General Leslie Rutledge and to the Arkansas Pharmacists Association and their allies in the state legislature for passing a law that withstood the legal assault from the PBMs.
On Oct. 6, the Court heard arguments in Rutledge v. PCMA. At stake was the right of states to enact regulations that affect PBMs. PCMA, the powerful PBM lobby, argued in this case, as they have in many previous cases, that states are preempted from regulating PBMs by the Employee Retirement Income Security of 1974. The case originates from a 2015 Arkansas law, that among other things, prohibited PBMs from reimbursing local pharmacies at a lower rate than what the pharmacies pay to fill the prescriptions.
The Court ruled that ERISA cannot be used by PBMs as a shield against state regulation. Justice Sonya Sotomayor wrote for the majority, with Justice Clarence Thomas writing a concurring opinion. In finding for Rutledge, the Court reversed a decision of the 8th U.S. Circuit Court of Appeals.
In her opinion, Sotomayor wrote that PBMs "are a little known but important part of the process by which many Americans get their prescription drugs." NCPA has asserted for years that PBMs operate in the shadows. This decision has brought PBMs' questionable practices into the bright light. This is not only a victory for independent pharmacy, but a huge win for our patients.
With the decision behind us, NCPA CEO Douglas Hoey said there is more work to be done. "Now our focus will be to work with state pharmacy associations, state legislators, and state policymakers to enact rules that curb unfair practices by the PBMs that limit patient choice and kill local pharmacies," Hoey said. "NCPA has been fighting in the courts alongside our state partners for more than a decade. It's been a long, tough road to the Supreme Court. Because of the Court's decision, the PBMs will no longer be able to hide behind federal law to escape state regulations."
This is a proud moment for NCPA, and we're grateful to all of you who supported our efforts for so many years.
We will offer analysis of this landmark decision to NCPA members. Please check our Battleground: SCOTUS page for updates.
