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ALEXANDRIA, Va. – A group of pharmacy organizations backing Oklahoma’s right to curb the abusive behaviors of pharmacy benefit managers blasted a decision of the Tenth Circuit Court of Appeals allowing PBMs to escape certain state regulation by hiding behind the alleged preemption of that law by federal ERISA and Medicare Part D laws.
The National Community Pharmacists Association, the American Pharmacists Association, the National Association of Chain Drug Stores, American Pharmacies, and the Oklahoma Pharmacists Association jointly signed on as amici to defend Oklahoma’s 2019 law regulating PBMs. The powerful PBM lobby, the Pharmaceutical Care Management Association, challenged the law in federal court. In 2022, the U.S. District Court for the Western District of Oklahoma largely upheld the law. PCMA appealed only four of the 13 originally challenged provisions. The District Court’s decision on the four remaining provisions was overturned on Aug. 15 by the Tenth Circuit.
“The Tenth Circuit decision is inconsistent with what other federal courts have decided, and it departs from the Supreme Court’s unanimous Rutledge decision, which clearly held that PBMs can’t hide behind ERISA. It must be overturned,” said B. Douglas Hoey, CEO of the National Community Pharmacists Association.
“The Supreme Court in Rutledge opened the door for states to regulate PBM transparency and accountability in otherwise opaque and heavy-handed dealings. The Mulready decision creates greater confusion rather than much-needed clarity for Oklahoma and other states,” said Michael D. Hogue, CEO and executive vice president of the American Pharmacists Association.
“The legal problems with the Tenth Circuit’s ruling are significant – including that it relies on a theory of preemption that the U.S. Supreme Court repeatedly has called ‘unsettling.’ The need is very, very real for state and federal action to confront PBM tactics that harm patients, the pharmacies that serve them, and virtually all Americans,” said Steven C. Anderson, president and CEO of the National Association of Chain Drug Stores.
“This ruling is incorrect and needlessly muddies the water in terms of state enforcement of PBM regulations in ERISA and Medicare Part D plans,” said Laird Leavoy, president of American Pharmacies. “It underscores the critical need for Congress and the Federal Trade Commission to take strong action at the federal level to create a uniform regulatory landscape.”
“The Oklahoma Pharmacy Association is disappointed, but not deterred, by the Tenth Circuit decision,” said Ryan Huddleston, incoming president of the Oklahoma Pharmacists Association. “This decision is a departure from other decisions made in federal court, as well as the unanimous decision of the Supreme Court in the Rutledge decision. We are currently reviewing all options available to the state of Oklahoma on this matter and will not stop advocating for the citizens of the great state of Oklahoma to make their own decisions as to where and who they choose to provide their medication needs.”
“The Tenth Circuit ruling is a frustrating setback for Oklahoma citizens who expected to see drug pricing transparency, to use the pharmacy they choose, and to see prescriptions at lower costs,” added State Rep. Marcus McEntire. “No one wants to be told by a company where they must purchase their prescriptions. This ruling is devastating to customer pharmacy choice and competition.”
