Recently, the Supreme Court released its decision in
Rutledge v. Pharmaceutical Care Management Association. The case considers whether the Employee Retirement Income Security Act of 1974 (“ERISA”) preempts an Arkansas state law regulating pharmacy benefit managers’ (“PBMs”) generic prescription drug reimbursement rates. The Supreme Court reversed and held that Arkansas’ state law regulating PBMs is not preempted by ERISA, clearing the way for stricter regulation of PBM pricing which may differ from state-to-state.
What Are PBMs and What Does This Ruling Have to Do with ERISA?
Insurance companies that issue fully insured ERISA group health plans and employer plan sponsors of self-funded ERISA group health plans frequently contract with PBMs to manage and administer the prescription drug component of the plan benefits.