NCPA and other independent pharmacy organizations filed a legal brief in federal court supporting PBM regulations in Iowa that have been challenged by business groups and insurance plans. The group, which also included the Iowa Pharmacy Association, the American Pharmacists Association, and the Independent Pharmacy Cooperative, filed an amicus brief urging the court to reject the challenge, saying PBMs are driving independent pharmacies out of business. A lower district court recently issued an injunction barring the state from enforcing the law.
The employer and insurance groups say the law is preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA) which regulates employee benefits plans. The independent pharmacy groups say PBMs aren’t employee benefits plans. They’re merely administrators hired by the plans, and so they can be regulated.
“ERISA does not regulate the business practices of third-party providers that, like PBMs, sell goods and services to ERISA plans. Otherwise, ERISA would displace state laws regulating everything from doctors, accountants and lawyers, to hospitals and insurers,” say the groups in their brief.
