ALEXANDRIA, Va. – Four pharmacy groups on Monday filed a court brief in support of a Louisiana law requiring pharmacy benefit managers administering Medicare Part D plans to reimburse pharmacies a 10-cent provider fee.
The case, Louisiana Independent Pharmacists Association v. Express Scripts, is the first test of a recent decision by the 8th Circuit Court of Appeals allowing North Dakota and other states in the jurisdiction to regulate PBMs.
Express Scripts, owned by the health insurance company Cigna, is one of the three largest pharmacy benefit managers in the country that collectively control nearly 80% of all prescriptions. Until recently they’ve been allowed to operate with very little oversight by the federal government or the states. In December 2020, the U.S. Supreme Court ruled unanimously in Rutledge v. PCMA that ERISA does not prohibit states from regulating PBMs. The North Dakota decision in PCMA v. Wehbi rendered on Nov. 17, 2021, affirmed the Supreme Court’s decision and confirmed that in some circumstances states may regulate PBMs in Medicare Part D. The Louisiana case would confirm the right of Texas, Louisiana, and Mississippi, the states in the U.S. Court of Appeals 5th Circuit, to curb PBM practices that are driving community pharmacies to the brink of collapse.
The groups filing their amicus on behalf of the Louisiana Independent Pharmacists Association are the National Community Pharmacists Association, the Texas Pharmacy Association, American Pharmacies, and Pharmacists United for Truth and Transparency.
“The dominoes are starting to fall,” said NCPA CEO B. Douglas Hoey. “PBMs have been allowed for decades to operate in darkness. Consumers and independent pharmacies have been subjected to the enormous market leverage PBMs, and now their health insurance plan owners, exert to drive small pharmacies out of business with unfair practices like the ones on display in Louisiana. NCPA has been fighting them in court for many years. The Supreme Court decision was a major breakthrough, and now pharmacies and consumers are in a 50-state battle that we aim to win. NCPA is proud to support our members in the 5th Circuit who will be directly affected by this decision.”
The Texas Pharmacy Association, which fought to pass major PBM regulation in Austin, said the Louisiana case has implications for its members and their patients.
“Texas pharmacists are proud to support our neighbors in Louisiana,” said Texas Pharmacy Association CEO Debbie Garza. “Texas enacted groundbreaking PBM reform legislation this year to help protect pharmacies and ensure patient choice. Community pharmacies have been under attack due to predatory business practices at the hands of PBMs, and it is critical for states to have the power to provide reasonable safeguards against PBM overreach.”
Pharmacists United for Truth and Transparency said the PBMs have a long history of hiding behind federal preemption to protect their anticompetitive practices.
“This lawsuit, though over a seemingly nominal 10-cent fee, could have far-reaching implications for states attempting to rein in the vast, unchecked power the largest PBMs exert over patients and providers,” said Monique Whitney, PUTT’s executive director. “Express Scripts claiming federal preemption to avoid paying a 10-cent provider fee is yet one more example of the types of business practices states should be carefully scrutinizing to understand the effect PBMs have on end costs to patients, employers and taxpayers.”
Laird Leavoy, president of American Pharmacies, said it’s important for pharmacy groups to rally around LIPA.
“American Pharmacies will always do everything we can to protect the business of independent pharmacy, whether it’s in the courtroom or state capitals,” said Leavoy. “We commend LIPA for their leadership in this lawsuit and appreciate working with NCPA, PUTT, and TPA on our brief. When we work together, we can have the biggest impact for our members and the patients they serve every day.”