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8th Circ. upholds N. Dakota rules for pharmacy benefit managers

(Reuters) - A federal appeals court has largely upheld a North Dakota law imposing various requirements on pharmacy benefit managers, including a ban on holding ownership interests in patient assistance programs or mail-order specialty pharmacies.

A unanimous panel of the 8th U.S. Circuit Court of Appeals ruled Wednesday that most of the law did not conflict with the federal law governing employee benefits plans, reversing its own earlier holding. It struck down some parts of the law, limiting fees charged by PBMs to pharmacies, on the grounds that they conflicted with the federal Medicare statute.

Lawyers for North Dakota and the Pharmaceutical Care Management Association (PCMA), the national PBM association that challenged the law, did not immediately respond to requests for comment.

PBMs serve as intermediaries that negotiate prescription drug prices between drugmakers, pharmacies and insurers. Many states have sought to regulate them in recent years.

PCMA sued North Dakota over its 2017 PBM law saying that it was preempted by the federal Employee Retirement Income Security Act because it necessarily affected ERISA-governed health plans. The 8th Circuit in August 2020 agreed.

In December 2020, however, the U.S. Supreme Court reversed the 8th Circuit's decision in a different case striking down an Arkansas PBM law on the same grounds, finding the law was not preempted because it did not "require plans to provide any particular benefit to any particular beneficiary in any particular way."

The court then ordered the 8th Circuit to reconsider its ruling on the North Dakota law.

The case is Pharmaceutical Care Management Association v. Tufte, 8th U.S. Circuit Court of Appeals, No. 18-2926.


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