Pandemic Complicates, Doesn’t Stop Push to Lower Drug Costs

With a presidential election looming and the COVID-19 pandemic still raging, it might stand to reason that drug pricing reform efforts would be on the backburner. However, there are indications that policymakers remain focused on initiatives that could have tangible business impacts for insurers, PBMs and drug manufacturers. Furthermore, legal battles over those initiatives are continuing to play out — including one case slated for Supreme Court review in the fall.

That case, Rutledge v. Pharmaceutical Care Management Association, concerns PCMA’s challenge to a 2015 Arkansas law that requires PBMs to reimburse pharmacies at or above their wholesale cost for generic drugs (RDB 8/21/15, p. 7). The trade group argues that PBMs should be exempt from such regulation by states, as they act as agents under the Employee Retirement Income Security Act of 1974. After split decisions in the lower courts, the Supreme Court agreed to hear the case, which experts have told AIS Health has far-reaching consequences for state efforts to regulate PBMs. Hearings are now scheduled for October after being delayed due to the COVID-19 pandemic.

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