A bipartisan group of attorneys general from 31 states and the District of Columbia filed an amicus brief in support of a petition for certiorari by Oklahoma’s insurance commissioner to review a decision by the U.S. Court of Appeals for the Tenth Circuit. In its ruling, the Tenth Circuit held that the Employee Retirement Income Security Act (ERISA) and Medicare Part D partially preempted an Oklahoma law regulating pharmacy benefit managers (PBMs).
The case is Glen Mulready, in His Official Capacity as Insurance Commissioner of Oklahoma et al., v. Pharmaceutical Care Management Association, Case Number 23-1213, Supreme Court of the United States.
The Pharmaceutical Care Management Association (PCMA) originally sued Mulready and Oklahoma’s insurance department in 2019, just before the state’s PBM would have gone into effect, arguing that it was preempted by ERISA and Medicare Part D. The Court stayed the case while the U.S. Supreme Court considered Rutledge v. PCMA. After that decision, the Court lifted the stay and granted summary judgment in favor of Oklahoma. PCMA appealed, and the Tenth Circuit reversed.
The attorneys general argued in its amicus brief that the U.S. Supreme Court should consider the petition to resolve a split between the circuit courts of appeal. According to their argument, the Tenth Circuit’s decision invalidating portions of Oklahoma’s Patient’s Right to Pharmacy Choice Act conflicts with Rutledge v. PCMA, a 2020 U.S. Supreme Court decision in which the high Court found that the federal laws did not preempt an Arkansas PBM regulation, and an Eighth Circuit decision, which found that ERISA did not preempt a North Dakota PBM regulation in 2021. Furthermore, the Tenth and Eighth Circuit decisions were in conflict regarding how Medicare Part D preempted portions of states’ PBM laws.
The attorneys general further pointed out in their brief that the PBMs hold significant market power and owe no fiduciary duty to anyone but their shareholders. As a result, PBMs have forced prescription costs to remain high and local pharmacies to close, limiting consumers to using mail-order pharmacies or making long drives to areas with national chain pharmacies. The attorneys general characterize Supreme Court action as necessary now that all states have enacted some PBM regulations in response to the needs of their residents.
