US Supreme Court Agrees To Hear Arkansas PBM ERISA Preemption Case

Jan 13, 2020

The U.S. Supreme Court has agreed to hear Rutledge v. PCMA, a case which seeks to reinstate an Arkansas law that regulates pharmacy benefit managers (PBM). The PBM's trade group, Pharmaceutical Care Management Association (PCMA), successfully challenged the law on Employee Retirement Income Security Act (ERISA) preemption grounds in the Eighth Circuit.

The court's decision to hear the case came at theurging of U.S. Solicitor General Noel J. Francisco, who argued that the Arkansas law doesn't affect ERISA plans and that the appeals court ruling contradicts past Supreme Court precedent that has allowed states to regulate other parts of the health system. Thirty-Three State Attorney Generals filed an amicus brief in support of Arkansas' right under the Constitution to regulate PBM activities to protect its citizens. 

At least 38 states have passed laws regulating PBM practices, which generate enourmous profit from prescription drug claims management. The states say the laws in question seek to help control ever-increasing prescription drug costs by making the relationships between pharmacies, PBMs, and consumers more transparent.

The PCMA has challenged several of these laws by arguing that they interfere with ERISA or Medicare statutes. The Eighth Circuit has twice agreed with the PCMA, striking down state laws in both Arkansas and Iowa, with a challenge to North Dakota's law pending. Outside the Eighth Circuit, the PCMA is challenging an Oklahoma regulation in federal district court.

IPC will be working with all other stakeholders to closely monitor and support the State of Arkansas and their case before the Supreme Court. Arguments in this case will occur in the Spring with a decision to follow by the end of the U.S. Supreme Court 2020 term in June.

Questions or Concerns? Contact IPC's Government Relations Team at: [email protected].