Appeals Court Urged to Let North Dakota’s Laws Regulating Pharmacy Benefit Managers Stand
A bipartisan group of 34 AGs, led by Minnesota AG Keith Ellison, filed an amicus brief in the U.S. Court of Appeals for the Eighth Circuit in support of North Dakota’s position in Pharmaceutical Care Management Association (“PMCA”) v. Wehbi, where North Dakota argued that states have the right to regulate pharmacy benefit managers (“PBMs”) and that this right is not preempted by either the Employee Retirement Income Security Act (“ERISA”) or by Medicare.
As previously reported, the U.S. Supreme Court, in Rutledge v. Pharmaceutical Care Management Association, held that ERISA did not preempt Arkansas’s law regulating the prices at which PBMs reimburse pharmacies because it did not relate to or have an impermissible connection with an ERISA plan and was just a form of cost regulation that applied to PBMs regardless of whether they managed an ERISA plan or not. The Supreme Court remanded the Wehbi case to the Eighth Circuit, directing it to reconsider its previous decision that ERISA preempts North Dakota’s law regulating PBMs in light of its Rutledge
The amicus brief argues, among other things, that the states have an interest in preserving each state’s authority to regulate companies doing business in their states and protecting residents from abusive business practices. The brief also argues that state regulation is necessary to prevent PBMs from imposing self-serving protections that reduce reimbursement rates to pharmacies and maximize rebates to PBMs and that ERISA does not preempt North Dakota’s laws because these laws do not alter the substantive coverage of benefit plans.