by Jane Anderson
The Supreme Court has agreed to hear a case that observers say
ultimately could upend state-based efforts to regulate PBMs and potentially
even lead to legislation on the federal level to rein them in. The lawsuit,
which was brought by the Pharmaceutical Care Management Association, challenges
a 2015 Arkansas law that requires PBMs to reimburse pharmacies at or above
their wholesale cost for generic drugs.
The case boils down to whether PBMs are acting as agents under
the Employee Retirement Income Security Act of 1974 (ERISA) and therefore are
exempt from state-level regulation, or whether they are a "non-interested
party and therefore subject to regulation," says Jeff Myers, founder of
health care consulting firm OptDis. He says that he believes it's likely the
high court justices will side with PCMA and the PBM industry, agreeing that
ERISA bars state laws like the one at issue in Arkansas.
"If the Supreme Court were to say states have the ability
to regulate the PBM marketplace inside ERISA plans…it would give states an
almost unlimited ability to force payers to pay a rate [to pharmacies] they
deem sufficient," Myers says. Independent pharmacy lobbies generally are
quite powerful in states, and would demand higher rates, he says, adding that
this would lead to higher drug prices overall.
If the Supreme Court rules that states can't directly regulate
PBMs, he adds, states may try to regulate them via insurers instead, and
"stop attacking PBMs directly." He says this is the more likely
scenario, and something the nine justices could be keeping in mind as they
consider this case.
"If the PBMs win, the precedent it sets is that states have
no ability to control" them under ERISA plans, Myers says. "The only
way you can do it is by going to the actual payer and saying, 'This is a
requirement for offering insurance in my state.'"
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