ACR co-authors amicus brief in support of North Dakota regulating PBM industry
The Alliance for Transparent & Affordable Prescriptions (ATAP), the Community Oncology Alliance (COA), and American Pharmacies filed an amicus brief with the 8th Circuit Court of Appeals in support of North Dakota's efforts to regulate practices of pharmacy benefit managers (PBMs) in Pharmaceutical Care Management Association (PCMA) v. Wehbi. The American College of Rheumatology (ACR) is a founding member of the coalition and played an active role in developing the brief.
"We hope this brief will support North Dakota's arguments and preserve this critical legislation that significantly curbs some of the most egregious practices that pharmacy benefit managers use to increase their profits at the expense of patients," said Dr. Angus Worthing, a practicing rheumatologist and the ACR's representative on ATAP's Executive Committee. "Formulary tiers should be based on efficacy and not which manufacturer pays the highest rebates and fees to the PBM. This approach reduces patient access, while the discounts are retained by the PBM and not passed on to patients and plans."
The amicus brief addresses the role of PBMs in the drug supply chain and the egregious nature of some PBM practices. North Dakota's legislation addresses some of these practices, such as banning gag clause provisions that restrict what pharmacists can tell patients and preventing PBMs from charging a copay that is more than the cost of the drug--spread pricing.
The amicus brief also explains how states can exercise regulatory power to curb PBM practices following the U.S. Supreme Court December 2020 decision in Rutledge v. Pharmaceutical Care Management Association (PCMA). The Rutledge case originated from a PCMA challenge to an Arkansas law that prohibited PBMs from reimbursing local pharmacies at a lower rate than what the pharmacies pay to fill prescriptions. PCMA argued that the law violated the preemption clause in the Employee Retirement Income Security Act (ERISA). While the 8th Circuit Court of Appeals agreed with PCMA, the Supreme Court unanimously ruled in favor of Arkansas. It held that state regulations that might impact costs in ERISA plans do not violate the preemption clause.
When PCMA v. Wehbi was first presented to the 8th Circuit Court of Appeals, the court also sided with the PCMA. The Supreme Court vacated the decision and remanded it back to the 8th Circuit Court of Appeals with instructions to reconsider in light of the decision made in Rutledge v. PCMA.
"The 8th Circuit should follow the Supreme Court's lead and reaffirm that States retain their traditional power to address harms inflicted by improper PBM practices in local markets," said Dr. Worthing.
The amicus brief filed by ATAP, COA, and American Pharmacies can be read in its entirety here. A ruling is not expected until the Spring of 2022.