Thirty-five state attorneys general signed a amicus brief arguing that Oklahoma state law should prevail over federal law in a case involving the question of who can regulate Pharmacy Benefit Managers (PBMs), intermediaries in the prescription drug industry .
After a national trade association for PBMs known as the The Pharmaceutical Care Management Association (PCMA) sued the State of Oklahoma, claiming that the state’s PBM regulations violated federal law, a district court ruled in favor of the state. The PCMA appealed the case. Now, state attorneys general are asking the appeals court to dismiss the PCMA’s claims and uphold the district court’s decision that Oklahoma can regulate PBMs.
“PBM market abuse has caused extensive harm, which states attempt to limit by imposing reasonable restrictions on PBM-pharmacy contracts that increase transparency, discourage rent-seeking behavior, and reduce personal transactions,” said Attorney General Keith Ellison of Minnesota who led the amicus brief.
The question of whether states can regulate PBMs has been raised in other states before and in 2020 reached the Supreme Court of the United States. In this case, the is courtingrejected PCMA’s challenge Arkansas Pharmacy Reimbursement Regulations.
Without federal guidelines regulating PBMs, states have put in place laws to protect pharmacies and consumers, Ellison said in A press release. His decision to litigate on behalf of Oklahoma stems from the knowledge that the state laws he helped enact in his own state of Minnesota could be affected by the court’s decision in the case of Oklahoma.
“A major driver of the high cost of pharmaceutical drugs is the abusive practices of pharmacy benefit managers,” Ellison said. “That’s why many states like Minnesota and Oklahoma have taken the first common-sense steps to regulate them. I have led this broad bipartisan coalition for Oklahoma, as I have previously for North Dakota, because I will not sit idly by and let the PBM industry undo the progress we have made so far. now when so much needs to be done to make life-saving drugs affordable for all Americans.
In the case of Oklahoma, the PCMA expressly asserted that the The Employee Retirement Income Security Act (ERISA), which protects certain aspects of employee benefits, is expected to be widely enforced and take precedence over state law. They also asserted that Medicare regulations should prevail over Oklahoma state law. But state attorneys general said that, “because Oklahoma’s contested laws do not dictate plan benefits or conflict with any Medicare standard, they are not preempted,” according to the dissertation. friend.
The issue of PBMs affecting competition and consumer impact has been hotly debated for years and recent research continues to build on this debate.
A american medical association report published this month revealed a general lack of competition at the state and metro level in places where PBMs provide services.
At the national level, the analysis revealed that a handful of PBMs held a collectively significant market share for the three PBM services most used by commercial insurers, including rebate negotiation, retail network management and the settlement of claims.
The 10 largest PBMs had a collective share of 97%. The four largest PBMs had a collective share of about 66% and six PBMs are used exclusively by one Blue Cross Blue Shield insurer or set of affiliates, according to the report.
The report also looked at market concentration and found that around 78% of states had highly concentrated PBM markets and around 85% of metropolitan areas had highly concentrated PBM markets.
In a press release regarding the October 13 report, AMA President Jack Resneck Jr, MD said, “The American Medical Association already has serious concerns about PBM business practices that may negatively impact patient access to prescription drugs and their cost. ”
The aim of the report is to inform the legislation.
“The new data presented by the AMA’s analysis is intended to help regulators, legislators, researchers and policymakers better assess merger proposals in the future that could harm patients by raising prices, reducing quality, reducing choice and stifling innovation,” Resneck said.
PCMA representatives did not immediately respond to a request for comment.
Photo: gerenme, Getty Images
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