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U.S. Supreme Court Grants Important Petition Regarding Arkansas PBM Law

On Friday January 10, 2020, the Supreme Court of the United States granted a petition for a writ of certiorari filed by the State of Arkansas wherein the Attorney General of Arkansas, Leslie Rutledge, asked the Court to review the U.S. Court of Appeals for the Eighth Circuit’s decision, specifically asking the Supreme Court to consider “[w]hether the Eighth Circuit erred in holding that Arkansas’s statute . . . is preempted by ERISA[.]” The law at issue is Arkansas’ Act 900, which is a comprehensive piece of legislation enacted by the State of Arkansas in 2015 to combat improper practices by Pharmacy Benefit Managers (PBMs). Among the various provisions of Act 900 was language regulating Maximum Allowable Cost (MAC) lists, which included a requirement that PBMs “reimburse pharmacies at a price equal to or higher than ‘the pharmacy acquisition cost – the amount that a pharmaceutical wholesaler charges for a pharmaceutical product as listed on the pharmacy’s billing invoice.'”

Arkansas’ petition was originally filed on October 22, 2018. More recently, the United States Solicitor General, Noel Francisco, filed a brief expressing the view of the United States regarding the Eighth Circuit’s prior ruling striking down Act 900. In the United States’ brief, the Solicitor General argues that Act 900 is not preempted by ERISA and further notes that the views expressed by the Respondent, the Pharmaceutical Care Management Association (PCMA) (a trade association exclusively representing the interests of PBMs), would make the doctrine of ERISA preemption nearly limitless in its application, a dangerous notion that would severely limit the ability of states to provide checks on PBMs’ conduct. The Solicitor General expressly asserts that the Eighth Circuit’s decision that ERISA preempts Act 900 is incorrect. Notably, but not unsurprisingly, the PCMA has opposed the petition and stated that it should not be granted.

How Frier Levitt Can Help
Frier Levitt continues to track this case and its impact on other state laws aimed at regulating PBM practices. The Firm is well positioned to assist pharmacies in challenging improper PBM practices and is also capable of assisting states in drafting effective laws that will withstand legal challenges by the PCMA and corresponding judicial scrutiny. Frier Levitt represents pharmacies across the United States in challenging PBM audits, network access and reimbursement practices and policies. In addition, it has also partnered with numerous state-based organizations to help in legislative efforts aimed at regulating PBM conduct. Contact Frier Levitt today to speak with an attorney about how your pharmacy or state may leverage the various federal and state laws that have been enacted to protect pharmacies and to learn the latest information about this important case.