Supreme Court hears drug benefits case with wide-ranging impact

Arkansas attorney Nicholas Bronni sought to distinguish PBMs from their insurance clients by arguing that the law only regulates PBM mechanics. The law doesn’t directly impact most patients because it only targets the rates that PBMs pay to pharmacies, not necessarily the profits that PBMs garner from health plans. Patients are protected by the law because it helps preserve access to local pharmacies, he said.

“There’s no requirement the PBM pass on any cost increases that might come along with that to the plan,” Bronni argued. “That’s entirely up to the PBM’s business decision.”

But PCMA attorney Seth Waxman argued that there is no legal distinction between a health plan and its contractor in this context, meaning the law attempts to regulate core aspects of a plan’s decisions. The patchwork requirements across states, coupled with the fact that the Arkansas law allows pharmacies to refuse prescriptions, have a significant impact on a plan’s operations, he argued.

“It’s all of those procedures that goes to what is indeed a central matter of plan administration, and certainly makes it impossible to have a nationally uniform plan administration,” Waxman said.

Arkansas Attorney General Leslie Rutledge held a news conference after the arguments, saying the law helps preserve access to prescription drugs, especially in emergency situations that drive patients to local pharmacies. Arkansas has lost 16 percent of its rural pharmacies in recent years, she said. 

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