California Attorney General Rob Bonta has joined a bipartisan coalition of 32 attorneys general in urging the U.S. Supreme Court to affirm states' authority to regulate pharmacy benefit managers (PBMs). The coalition filed an amicus brief requesting the court to review a decision from the U.S. Court of Appeals for the Tenth Circuit, which ruled that federal laws preempt Oklahoma's PBM regulations.
"It is simply unacceptable that Americans cannot afford lifesaving drugs due to pharmaceutical prices that are soaring at an alarming rate," said Attorney General Bonta. "States have the responsibility to regulate these deliberate, unfair, and deceptive pricing tactics set by PBMs that allow them to line their own pockets at the expense of consumers."
PBMs act as intermediaries between prescription-drug plans, pharmacies, and drug manufacturers. They profit through fees charged to market participants and by reimbursing pharmacies less than what they receive from plans for dispensing medications. Critics argue that PBMs reduce competition, limit medication access, and enforce confidentiality requirements that hinder transparency.
For decades, PBMs have largely operated without regulation. In response, states like Oklahoma have enacted laws to protect consumers and pharmacies. Oklahoma's regulations aim to ensure adequate pharmacy networks and prevent self-dealing among PBMs. These laws require sufficient geographic coverage for pharmacy networks and prohibit PBMs from excluding pharmacies based on employee probationary status or steering consumers towards specific in-network pharmacies.
In Pharmaceutical Care Management Association (PCMA) v. Mulready, PCMA challenged Oklahoma’s regulations, arguing that federal laws ERISA and Medicare Part D preempt state laws. Although a district court initially rejected PCMA’s claims, the Tenth Circuit later reversed this decision. Oklahoma has now petitioned the U.S. Supreme Court for review.
The coalition contends that the case raises significant federal law questions requiring clarification from the Supreme Court. They note that the Tenth Circuit’s decision conflicts with previous rulings by both the Supreme Court in PCMA v. Rutledge and similar cases from other circuits.
Attorney General Bonta remains committed to advocating for state regulation of PBMs and broader healthcare industry practices. In January 2023, he filed a lawsuit against major insulin manufacturers over alleged unlawful business practices inflating insulin costs in violation of California's Unfair Competition Law.
Joining Attorney General Bonta in this bipartisan brief are attorneys general from Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, 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 and the District of Columbia.
A copy of the brief can be found here.