On December 10, 2020, in an opinion by Justice Sonia Sotomayor, the United States Supreme Court issued a landmark ruling in favor of the State of Arkansas (Arkansas Attorney General Leslie Rutledge filed the lawsuit in defense of the interests of pharmacies and patients), determining that an Arkansas state law regulating pharmacy benefit managers’ (PBM) reimbursement practices is not preempted by the Employee Retirement Income Security Act of 1974 (ERISA). In reaching its unanimous decision (8-0), the Supreme Court reversed a ruling by the 8th Circuit Court of Appeals which found that states could not regulate PBM payment practices.
History: In April 2015, the Arkansas state legislature passed Act 900, which prohibits PBMs from reimbursing pharmacies less than what the pharmacies pay to fill prescriptions. In August 2015, the Pharmaceutical Care Management Association (PCMA)—the trade association representing PBMs—challenged this law in court. Several pharmacy trade associations (National Community Pharmacists Association (NCPA), American Pharmacists Association (APhA), Arkansas Pharmacists Association (APA) and National Association of Specialty Pharmacies (NASPA)) joined efforts to advocate to ensure the Arkansas law remains intact. Today’s Supreme Court decision provides a victory for pharmacists in Arkansas and across the United States.
Potential Impact: The Court’s ruling is especially important to independent pharmacies, such as AmerisourceBergen’s Good Neighbor Pharmacy customers, who have advocated for many years in the States and in Congress for legislation that creates greater oversight of PBMs, in an effort to ensure pharmacies are fairly and adequately reimbursed. Arkansas and other states that have passed or plan to pass legislation to regulate PBMs to ensure patient access and fair competition, can move forward more confidently with laws that regulate PBMs’ pharmacy reimbursement for generic drugs. It is likely that we will see additional states attempt to pass legislation similar to Arkansas’s law, or take other legislative and/or regulatory actions, to prevent PBMs from engaging in practices that underpay pharmacists.
AmerisourceBergen supports independent, community, retail, specialty, hospital, physician dispensing and long-term care pharmacies and the critical role each pharmacy setting and all pharmacists play in providing effective patient care and healthcare delivery.