July 06, 2021
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ACR, advocacy groups file amicus brief in support of regulating pharmacy benefit managers

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The Alliance for Transparent & Affordable Prescriptions, the Community Oncology Alliance and American Pharmacies have filed an amicus brief in support of efforts in North Dakota to regulate pharmacy benefit managers.

The brief, co-authored by the American College of Rheumatology, a founding member of the ATAP coalition, has been filed with the U.S. 8th Circuit Court of Appeals in the case of Pharmaceutical Care Management Association (PCMA) v. Wehbi, according to an ACR press release.

“Formulary tiers should be based on efficacy and not which manufacturer pays the highest rebates and fees to the PBM,” Angus Worthing, MD, FACP, FACR, said in the release. “This approach reduces patient access, while the discounts are retained by the PBM and not passed on to patients and plans.”. Source: Adobe Stock

“We hope this brief will support North Dakota’s arguments and preserve this critical legislation that significantly curbs some of the most egregious practices that pharmacy benefit managers use to increase their profits at the expense of patients,” Angus Worthing, MD, FACP, FACR, a practicing rheumatologist and the ACR’s representative on the ATAP executive committee, said in the release.

“Formulary tiers should be based on efficacy and not which manufacturer pays the highest rebates and fees to the PBM,” he added. “This approach reduces patient access, while the discounts are retained by the PBM and not passed on to patients and plans.”

Angus Worthing

North Dakota state lawmakers approved legislation aimed at regulating pharmacy benefit managers in 2017. Among other provisions, the law bans gag clause provisions that restrict what pharmacists can tell patients and prevents pharmacy benefit managers from charging a copay that is more than the cost of the drug, a practice known as spread pricing.

The PCMA, a trade group representing pharmacy benefit managers, filed a federal lawsuit in that same year challenging the law. The case, PCMA v. Wehbi, initially resulted in the 8th Circuit Court of Appeals ruling in favor of the PCMA, stating that the North Dakota law is preempted by federal law.

However, the case is now back with the appeals court after the U.S. Supreme Court in December 2020 upheld a similar state law in Arkansas. That case, Rutledge v. PCMA, stemmed from a PCMA challenge to a law prohibiting pharmacy benefit managers from reimbursing local pharmacies at a lower rate than what the pharmacies pay to fill prescriptions. The PCMA argued that the state law violated the preemption clause in the federal Employee Retirement Income Security Act (ERISA). Although the 8th Circuit Court of Appeals agreed with PCMA, the U.S. Supreme Court unanimously ruled in favor of Arkansas, arguing that state regulations that might impact costs in ERISA plans do not violate the preemption clause.

In addition, as part of the ruling, the Supreme Court vacated the initial PCMA v. Wehbi decision and remanded it back to the 8th Circuit with instructions to reconsider in light of Rutledge v. PCMA.

In the amicus brief, the authors address the role of pharmacy benefit managers in the drug supply chain, characterizing some of their practices as “egregious.” The brief also explains how states can exercise regulatory power to curb their practices following the recent U.S. Supreme Court decision.

A new ruling from the 8th Circuit is not expected until the spring of 2022.

“The 8th Circuit should follow the Supreme Court’s lead and reaffirm that States retain their traditional power to address harms inflicted by improper PBM practices in local markets,” Worthing said in the press release.