Groups File Amicus Brief in Support of North Dakota’s Efforts to Regulate PBMs
Recently, the Alliance for Transparent & Affordable Prescriptions (ATAP), the Community Oncology Alliance (COA), and American Pharmacies filed an amicus brief with the Eighth Circuit Court of Appeals in Pharmaceutical Care Management Association (PCMA) v. Wehbi. In the amicus brief, the parties lobbied to support North Dakota’s efforts to regulate practices of pharmacy benefit managers (PBMs). The American College of Rheumatology (ACR) is a founding member of the coalition and played an active role in developing the brief.
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 outlines how states can exercise regulatory power to curb PBM practices following the United States Supreme Court decision in Rutledge v. Pharmaceutical Care Management Association (PCMA). The Rutledge case came from 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. In Rutledge, 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, holding that state regulations that have the potential to impact costs in ERISA plans do not violate the preemption clause.
PCMA v. Wehbi was previously before the 8th Circuit Court of Appeals, at which time the court sided with the PCMA. However, the Supreme Court vacated that prior decision and remanded it back to the 8th Circuit Court of Appeals with instructions to reconsider based on the Rutledge v. PCMA ruling.
“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.” Dr. Worthing went on to note, “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.”
The amicus brief filed by ATAP, COA, and American Pharmacies can be found here. It is not likely that a ruling will be made until the Spring of 2022.