Attorney General Raoul asks Supreme Court to rule on states’ authority to regulate pharmacy benefit managers
Chicago – Attorney General Kwame Raoul, along with a bipartisan coalition of 32 attorneys general, has requested the U.S. Supreme Court to grant certiorari in a case concerning states' authority to regulate pharmacy benefit managers (PBMs). In an amicus brief, Raoul and the coalition ask the court to review a decision from the U.S. Court of Appeals for the 10th Circuit, which held that federal laws preempt Oklahoma's regulations on PBMs.
Raoul and his colleagues aim to protect consumers by ensuring states can regulate PBMs. The attorneys general argue in their amicus brief that the broad approach of the Pharmaceutical Care Management Association (PCMA) and the 10th Circuit towards federal preemption would “severely and unduly impede states’ abilities to protect their residents and regulate businesses.”
“PBMs have put a focus on driving up their own profits at the expense of patients,” Raoul stated. “State regulation of the prescription drug market, including pharmacy benefit managers, is a critical tool in protecting residents and addressing issues related to access and affordability of prescription drugs. I will continue to advocate for reforms that ensure prescription pricing is transparent and reduce the financial burden on patients.”
PBMs act as intermediaries in the pharmaceutical industry between prescription drug plans, pharmacies, and drug manufacturers. They profit from fees charged to market participants and by reimbursing pharmacies less than what they are paid by plans for dispensing medications.
PBMs have implemented practices that reduce competition, limit access to medications, and impose confidentiality requirements limiting transparency. For instance, PBMs have attempted to compel consumers to use PBM-affiliated pharmacies by offering preferential rates or denying coverage at non-affiliated pharmacies.
Historically unregulated for decades, PBMs are now facing increasing scrutiny. Earlier this year, Attorney General Raoul joined 38 other attorneys general urging Congress for further federal regulation of PBMs. In lieu of federal oversight, states have moved forward with protective measures for consumers and pharmacies. The challenge against Oklahoma’s laws is part of ongoing litigation initiated by PCMA aiming to obstruct state regulations designed to ensure adequate pharmacy networks and prevent self-dealing among PBMs.
Today's brief marks another step in Raoul's continuous efforts supporting state regulation of PBMs. Previously, in 2020, he joined a bipartisan coalition of 46 attorneys general filing an amicus brief supporting an Arkansas law regulating pharmacy reimbursement rates. In 2021, he supported North Dakota’s PBM regulations alongside a bipartisan coalition of 34 attorneys general.
Joining Attorney General Raoul in today's brief are attorneys general from Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Indiana, Louisiana, Maine, Maryland Massachusetts Michigan Minnesota Mississippi Nebraska Nevada New Hampshire New Jersey New York North Carolina Ohio Oregon Pennsylvania Rhode Island South Dakota Texas Utah Virginia Washington.