Pharmacy Groups File Amicus Brief Supporting State Level PBM Regulation

ALEXANDRIA, Va. (March 2, 2020) – The National Community Pharmacists Association (NCPA) and the Arkansas Pharmacists Association (APA), along with the American Pharmacists Association (APhA) and the National Alliance of State Pharmacy Associations (NASPA), filed an amicus brief today supporting states’ rights to regulate pharmacy benefit managers ahead of the landmark case, Rutledge v. the Pharmaceutical Care Management Association,  set to be heard by the Supreme Court on April 27, 2020.

“PBMs increased fees on pharmacies by 45,000 percent simply because they can. They steer patients to their own pharmacies simply because they can. They increase out-of-pocket costs for patients simply because they can. They hold pharmacies hostage to inflexible, one-sided contracts simply because they can. They behave like monopolies simply because they can. It’s time to say to the PBMs, ‘No, you can’t,” said B. Douglas Hoey, NCPA CEO.  “Our brief argues that the states have the obligation and the legal authority under federal law to protect their local businesses and their patients.”

In addition to the pharmacy trade groups, pharmacy associations from almost every state as well as the District of Columbia have signed on to the brief, signaling widespread national support for the regulation of PBMs.

“We are thrilled and grateful that every state association and three national pharmacist associations have united and signed on to this amicus brief supporting the years-long battle pharmacists have fought against the Goliath PBM industry,”  said APA CEO and Executive Vice President John Vinson, Pharm.D. “Pharmacists and patients in Arkansas are enthusiastically assured in Attorney General Leslie Rutledge and her team in this landmark case that could improve healthcare for every patient in the United States.”

In their brief, the groups argue that “PBMs’ below-cost reimbursements have left marks on the pharmacy industry, particularly on independent rural pharmacies. In the last 15 years, 16.1% of independently owned rural pharmacies have closed, and 630 rural communities went from having one or more pharmacies to having none.”

“Currently unregulated PBM business practices limit access to pharmacists’ care and thus, to optimal use of medicines by the American public,” said APhA Executive Vice President and CEO Thomas E. Menighan, BSPharm, MBA, ScD (Hon), FAPhA.  “A Supreme Court ruling in favor of Arkansas’ oversight of PBMs would ensure patients of fairness, transparency and access to a readily available, knowledgeable health care provider – their pharmacist.”

The PBMs have argued for years that they are exempt from state regulation by vague language in the Employer Retirement Income Security Act of 1974. The law precludes states from regulating employee benefit plans, but not third-party vendors hired by the plans, say the pharmacy groups.

“When plans enter the market to purchase the goods and services they provide beneficiaries—or anything else they require to function—they are not immune from ordinary market regulation,” say the groups in their brief.

Rebecca Snead, CEO and Executive Vice President of NASPA, said, “When every state pharmacy association across the country unites to say, ‘This is a problem in our state,’ you know it’s important issue. PBMs should not be able to hide behind ERISA to avoid state regulation.”

To view the amicus brief, click here.