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SCOTUS: States Can Regulate Insurance Plan Contractors

While briefly discussing (accessible link below for addition information) this decision, keep in mind this is a big deal in lowering the costs of pharmaceuticals as it goes right to the source of some of the excess takings involved in the distribution of drugs from manufacturer to drug stores.

December 10, 2020: the Supreme Court handed a win to states and broadened the path for state health care cost control efforts. In Rutledge v. Pharmaceutical Care Management Association, the Court 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.

Speaking for an unanimous Court, Justice Sonia Sotomayor, held that “state laws 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). 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.”