Attorney General Paxton has joined a Minnesota-led amicus brief in the Denver-based U.S. Court of Appeals for the Tenth Circuit in support of Oklahoma’s right, as well as the right of all states, to protect consumers through the regulation of pharmacy benefit managers (PBMs). PBMs are corporate administrators of prescription drug benefit programs and serve as the intermediary between drug companies and pharmacies.
In the case of Pharmaceutical Care Management Association v. Mulready, et al., the national trade association for PBMs is claiming that federal regulations, namely the Employee Retirement Income Security Act of 1974 (ERISA) and Medicare, preempt state regulations and limit the authority of states to regulate PBMs.
But state oversight of PBMs is needed to protect consumers. State-level protections have helped safeguard consumers from the anti-competitive and abusive trade practices that PBMs have engaged in historically, and ERISA and Medicare were not written to preempt state laws but to work in concert with them.
The brief explains the importance of individual states’ ability to regulate PBMs and protect their citizens: “PBMs’ market abuses have caused numerous harms, which states are attempting to curtail by placing reasonable restrictions on PBM-pharmacy contracts that increase transparency, discourage rent-seeking behavior, and reduce self-dealing. State laws to this effect do not alter substantive coverage of ERISA plans, and therefore they are not preempted. Similarly, no Medicare standard overlaps to preempt states from requiring PBMs to give pharmacies preferred-participation status if they meet the PBM’s requirements.”
To read the brief, click here.