While multiple states have passed laws that regulate and reform policies of pharmacy benefit managers (PBMs), these laws have faced a recent deluge of legal challenges in federal court by industry groups and some plan sponsors.
While multiple states have passed laws that regulate and reform policies of pharmacy benefit managers (PBMs), these laws have faced a recent deluge of legal challenges in federal court by industry groups and some plan sponsors. At the same time, Congress has imposed new transparency requirements that affect the compliance duties of sponsors of Employee Retirement Income Security Act (ERISA)-covered group health plans. These developments have led to differing rules for plan sponsors to follow depending on the jurisdiction and the type of law involved.
In 2020, the U.S. Supreme Court decided Rutledge v. Pharmaceutical Care Management Association, holding that ERISA does not preempt state laws regulating PBM reimbursement rates paid to pharmacies. Since that decision, lower courts have found Rutledge inapplicable when holding that ERISA preempts other PBM regulatory laws. For instance, in 2023, the U.S. Court of Appeals for the Tenth Circuit ruled that ERISA preempted several provisions of an Oklahoma PBM law, including those targeting network access standards and “any-willing-pharmacy” requirements, as applied to self-funded plans. The U.S. Supreme Court declined to review the ruling in Pharmaceutical Care Management Association v. Mulready, leaving...
Executive Summary What’s new: The Seventh Circuit affirmed dismissal of an outsider’s qui tam action under the False Claims Act, outlining a potential path to dismissal where a relator lacks ins...