NACDS brief defends North Dakota law on PBMs

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Brief filed in the U.S. Court of Appeals for the Eighth Circuit

ARLINGTON, Va. – A cogent amicus brief filed by the National Association of Chain Drug Stores (NACDS) points directly to U.S. Supreme Court precedent in defending “one of numerous state laws that help protect the health and safety of their citizens by promoting the economic viability of their trusted community pharmacies.”

NACDSNACDS filed the brief today in the U.S. Court of Appeals for the Eighth Circuit regarding Pharmaceutical Care Management Association (PCMA) v. Dirk Wilke. At issue is a North Dakota law that, as described by NACDS, “prevents PBMs [pharmacy benefit managers] from forcing pharmacies to lose money every time they fill a prescription, and therefore ensures that those pharmacies can keep their doors open to patients.”

The case’s path through the courts was made volatile by the unanimous U.S. Supreme Court’s ruling in Rutledge v. Pharmaceutical Care Management Association, a case that has proven to be pivotal for state laws that regulate PBMs.

NACDS – which also submitted a key amicus brief in the Rutledge case – says the U.S. Supreme Court ruling now provides compelling precedent to reverse course in the North Dakota case. As NACDS explains, the Rutledge case and the North Dakota case now before the Eighth Circuit both hinge on the issue of whether state laws are preempted by the federal Employee Retirement Income Security Act (ERISA).

Rutledge v. Pharmaceutical Care Management Association makes clear that ERISA does not preempt North Dakota’s statute,” NACDS states in its brief to the Eighth Circuit.

NACDS argues, “ERISA does not disable states from protecting the interests of pharmacies and the communities they serve merely because the state law may have indirect economic effects on health care plans.”

NACDS says the North Dakota statute “regulates the economic relationship between [PBMs] and pharmacies, neither of which are ERISA plans” and that “under Rutledge, any indirect effect North Dakota’s law will have on the relationship between PBMs and ERISA plans is insufficient to trigger ERISA preemption.”

Discussing the “laudable legislative goal” of the North Dakota statute, NACDS says in the brief, “The statute is designed to mitigate a health care crisis: the rampant closure of pharmacies. Pharmacies not only dispense medications, but also provide front-line health care like immunizations, tobacco cessation, hormonal contraceptive therapies, blood pressure, glucose testing, flu shots, and information to customers on a variety of health-related matters. When a pharmacy closes in a rural area, local residents may have no alternative health care provider nearby, leading to the risk of noncompliance with medication regimens and poor health outcomes.”

Addressing claims by PCMA, NACDS’ brief states, “All of PCMA’s arguments were considered and rejected by the Supreme Court in Rutledge” and that “in reality, PCMA is not seeking centralized federal regulation; it is seeking no regulation.”



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