The Seventh Circuit Court of Appeals ruled favorably for community pharmacy on a legal challenge to Rule 128, the “fair and reasonable” reimbursement issue NCPA recently covered related to enforcement efforts by the Arkansas Insurance Department. The Seventh Circuit rejected the plaintiff’s ERISA preemption challenge to Rule 128, ruling that regulating PBM reimbursement rates affects plan costs rather than structure or administration.
Relying on Rutledge v. PCMA, the court determined that state laws requiring minimum dispensing fees do not impermissibly dictate plan benefits or interfere with national administration. The plaintiff also challenged the ERISA data reporting aspects of Rule 128 citing Gobeille v. Liberty Mutual Insurance Co., but the court ruled that the reporting requirement is strictly a mechanism to enforce a valid, non-preempted state cost regulation. The ruling can be found here.
