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In Oklahoma, a law called the Patient’s Right to Pharmacy Choice Act aimed to give patients more control over where they could get their prescriptions filled. This act clashed with the federal Employee Retirement Income Security Act (ERISA) and Medicare Part D.

The Pharmaceutical Care Management Association (PCMA), an industry group representing pharmacy benefit managers (PBMs), sued to block the Oklahoma law. In Pharmaceutical Care v. Mulready, et al., No. 22-6074 (10th Cir. 2023), PCMA alleged that federal laws, Medicare Part D and the Employee Retirement Income Security Act (ERISA), preempt Oklahoma’s laws.

The federal district court rejected PCMA’s claims but in August 2023, the Tenth Circuit reversed, holding that ERISA and Medicare preempt Oklahoma’s laws.

In an amicus brief to the U.S. Supreme Court, a coalition of 36 state Attorney Generals (including California’s) asks the Court to grant Oklahoma’s request that the Court review a decision from the U.S. Court of Appeals for the Tenth Circuit.

According to its amicus brief “states have a compelling interest in preserving their traditional authority to protect their residents’ access to healthcare and to regulate business practices in their states. To advance these interests, all states regulate [PBMs] to some degree.” PCMA and the Tenth Circuit’s broad approach to federal preemption, however, would “severely and unduly impede states’ abilities to protect their residents and regulate businesses.”

The challenge to Oklahoma’s laws is the latest of a string of lawsuits by the PBM industry’s national lobbying association, Pharmaceutical Care Management Association (PCMA). Mulready marked the second case to reach a federal court of appeals since the U.S. Supreme Court addressed state regulation of PBMs in Rutledge v. Pharmaceutical Care Management Association 592 U.S. 80 (2020).

SCOTUS ruled 8-0 that the Employee Retirement Income Security Act (ERISA) did not preempt Arkansas’s law regulating pharmacy benefit managers (PBMs), the intermediaries that administer prescription drug benefits for health plans.

In Rutledge, Justice Sonia Sotomayor spoke for the unanimous Court in holding that a state law requiring PBMs to pay pharmacies no less than their acquisition costs for prescription drugs was not preempted by ERISA, the federal statute governing employee benefits. The Court concluded, “ERISA does not pre-empt state rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage.”

In their current brief to the Supreme Court, the states argue that the “Court should grant certiorari review for two key reasons. First, the Tenth Circuit decided important questions of federal law in a manner that conflicts with the Eighth Circuit’s resolution of the same issues. Sup. Ct. R. 10(a). Second, the Tenth Circuit’s decision conflicts with this Court’s precedent. Id. 10(c). States have a significant interest in knowing the extent to which ERISA and Medicare may preempt their regulations of PBMs. By contradicting the Eighth Circuit’s holdings and adopting a substantially broader view of ERISA preemption than what this Court endorsed in Rutledge, the Tenth Circuit’s decision throws that knowledge into substantial doubt. The result is nationwide uncertainty for regulators, a corresponding increase in consumer harms, and a substantial likelihood of continued litigation on the topic in light of the deep circuit split. The Court should grant review to put an end to that uncertainty and its corresponding harms.”