NCPA Cheers SCOTUS Decision to Rule on States' Authority to Regulate PBMs

Jan 23, 2020

NCPA cheered the U.S. Supreme Court's decision to hear an Arkansas case to decide whether ERISA preempts (supersedes) a state law that regulates pharmacy benefit managers — massive corporate middlemen who have operated in a regulatory no-man's land for decades.

"Pharmacy benefit managers have virtually no oversight, and as a result they behave like monopolies," said NCPA CEO B. Douglas Hoey, pharmacist, MBA. "Not only have PBMs failed to manage the cost of prescription drugs, which is why they were created, but they are inflating prices for patients and destroying local pharmacies."

NCPA has been fighting to rein in PBMs for years. NCPA pushes for state laws that would end PBM abuses such as spread pricing and gag clauses that cause patients' insurance premiums and prescription out-of-pocket costs to soar. The latest battle comes from a case in Arkansas, where the state was blocked by a lower court ruling from enforcing Act 900, a law that effectively prohibits PBMs from reimbursing pharmacies below the pharmacies' cost to acquire the medication and includes provisions that would disclose to consumers and plans the hidden profit motives of PBMs.

NCPA together with the Arkansas Pharmacists Association filed a brief supporting the state before the U.S. Court of Appeals for the Eighth Circuit, and will file a similar brief before the U.S. Supreme Court. NCPA is grateful to all the hard work done by APA. The Court will likely hear oral arguments in early spring. It will render a decision before the end of June, which marks the end of the Court's current term.

Stay tuned for more reporting and analysis from NCPA.