Dec 10, 2020
Read the Court's Opinion

Christmas came two weeks early.

In a momentous decision that will empower state efforts to regulate PBMs, the U.S. Supreme Court this morning ruled in favor of Arkansas in the seminal case of Rutledge v PCMA, holding that state MAC reform laws are not pre-empted by ERISA.

American Pharmacies joins with independent community pharmacy organizations across the country in congratulating the hard work and perseverance of Arkansas Attorney General Leslie Rutledge, the Arkansas Pharmacy Association and national and state groups that supported their legal fight. It is a historic win. 

PBMs have been arguing for years to legislators and in court that a wide variety of state PBM-reform laws are pre-empted by The Employee Retirement Income Security Act and that states have little power to regulate PBM Practices  The High Court's unanimous decision today appears to put those arguments to rest.

While Rutledge v. PCMA dealt with an Arkansas-specific MAC reform law, the High Court’s ruling will have wide applicability across the country. Both current and prospective state laws nationwide will vastly increase their reach across all areas of commercial business, even employer-sponsored ERISA plans. American Pharmacies will publish additional insights from this momentous opinion after we have had more time to digest it.

An in-depth explanation of the background of this case was provided in our earlier APRx newsletter. And in a well-attended webinar on Oct. 10, APRx General Counsel Miguel Rodriguez provided expert insights on this landmark case and gave an optimistic prediction for the ruling. If you missed the webinar, you can access it here.

PBMs have experienced a significant growth in wealth and power since their beginning as claims processors in the 1990s. Just three PBMs now control more than 75% of pharmacy benefits in the United States, positioning them to implement practices that increase their own profits at the expense of patients, plan sponsors and payers, and pharmacy providers.

American Pharmacies has always fought for the interests of independent retail pharmacies and has accomplished more state reforms of PBM practices than any other pharmacy organization. Our advocacy subsidiaries -- Texas Pharmacy Business Council and New Mexico Pharmacy Business Council -- have collectively passed more than 10 bills that regulate PBM practices and curtail their abuses. And our VP of Government Affairs, Michael Wright, has been a strong presence in many other states in assisting pharmacy-driven legislative efforts against PBMs.