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Pharmacy managers case due in court

The U.S. Supreme Court will hear oral arguments on April 27 in Arkansas’ legal battle with companies that pay pharmacies on behalf of health plans, according to a court calendar released Friday.

At issue is an appeal by state Attorney General Leslie Rutledge of lower court rulings that have limited the state’s ability to regulate the companies, known as pharmacy benefit managers.

In November 2018, 32 states and the District of Columbia filed a brief in support of Arkansas, saying the lower court decisions have created “confusion and uncertainty regarding States’ power to regulate” the companies.

“We are now one step closer to protecting Arkansans from skyrocketing prescription drug prices by holding PBMs accountable,” Rutledge said in a news release Friday. “Nationwide, rural pharmacies are faced with unfair business practices by PBMs that harm consumers and our communities.”

The National Community Pharmacists Association, American Pharmacists Association, National Alliance of State Pharmacy Associations and Arkansas Pharmacists Association said Friday that they will also file a brief in the case in support of Arkansas.

“The PBMs have been hiding behind a vaguely worded section of a federal law that was never supposed to apply to them,” B. Douglas Hoey, chief executive of the community pharmacists group, representing 21,000 drugstores nationwide, said in a news release. “They operate without meaningful regulation, and because of that they’re able to stack the deck in their favor, and at the expense of community pharmacies and their patients.”

The Pharmaceutical Care Management Association, which represents pharmacy benefit managers, has argued that state regulations create administrative burdens and limit health plans’ options.

That group filed a lawsuit, challenging a 2015 Arkansas law, that led to Rutledge’s appeal to the country’s top court.

Arkansas’ Act 900 of 2015 prohibits pharmacy benefit managers from paying affiliated pharmacies more than what they pay other drugstores for the same drugs.

It also requires pharmacy benefit managers to establish a process for pharmacies to file appeals when the reimbursement for a drug is below the pharmacist’s cost to obtain it from a wholesaler.

U.S. District Judge Brian Miller ruled in 2017 that the law can’t apply to plans in which an employer, rather than an insurance company, is ultimately responsible for paying for employee’s health care costs.

Under the federal Employment Retirement Income Security Act of 1974, those plans are regulated by the U.S. Department of Labor rather than state insurance departments.

The 8th U.S. Circuit Court of Appeals in St. Louis upheld Miller’s finding in 2018.

Arkansas pharmacists say the court rulings have made Act 900 difficult to enforce and limited the reach of subsequent laws targeting pharmacy benefit managers.

The Supreme Court in January agreed to hear Rutledge’s appeal of the 8th Circuit ruling.

A decision is expected by the end of June, the pharmacist groups said.

Metro on 02/23/2020

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