More than half of the country’s state attorneys general have banded together to get the Supreme Court’s input on pharmacy benefit manager (PBM) regulation.
In a brief filed this week, 32 of the chief lawyers told the top court that a decision from the U.S. Court of Appeals for the Tenth Circuit handed down last summer has thrown the extent of states’ regulatory authority over the intermediaries in question. Oklahoma officials, the case’s defendants, filed a petition for the Supreme Court to review the case last month.
The dispute in question was brought by the Pharmaceutical Care Management Association (PCMA), a trade association that represents PBMs. PCMA challenged a 2019 Oklahoma law that sought to level the playing field for smaller pharmacies by regulating PBM pharmacy networks and patient steering within those networks.
PCMA took the law to court, arguing that federal Employee Retirement Income Security Act (ERISA) and Medicare laws preempted the state legislation. The trade group was initially shot down by the district court but found success upon appeal.
The bipartisan attorneys general coalition, writing to the Supreme Court, said that the Tenth Circuit’s decision conflicts with one the top court itself handed down in 2020 (PCMA v. Rutledge) and other cases that reached the Eighth Circuit a year later.
“The result is nationwide uncertainty for regulators, a corresponding increase in consumer harms, and a substantial likelihood of continued litigation on the topic in light of the deep circuit split,” they wrote in the filing (PDF). “The Court should grant review to put an end to that uncertainty and its corresponding harms.”
Alongside the clarity, the attorneys general are hoping that the Supreme Court comes down on the side of Oklahoma.
The group told the Supreme Court that state-level PBM regulations “are also critical for states to protect the public from harmful business practices,” and noted that smaller pharmacies and end consumers “are particularly vulnerable to the harms of the system that PBMs have fostered and continue to benefit from.” Those practices include spread pricing, consumer steering and prescription diversions.
“States have the responsibility to regulate these deliberate, unfair, and deceptive pricing tactics set by PBMs that allow them to line their own pockets at the expense of consumers,” California Attorney General Rob Bonta, one of the 32, said in a release announcing the filing.
Since the Tenth Circuit’s reversal, CVS Health’s PBM, Caremark, has also sued Oklahoma over the same law.