States Can’t Impose Costly Mandates
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States Can’t Impose Costly Mandates

A pharmacy benefits managers (PBMs) trade association sued the Attorney General of Arkansas. They claimed a state statute regulating how PBMs created maximum allowable cost lists setting reimbursement rates to pharmacies dispensing generic drugs was preempted by the Employee Retirement Income Security Act (ERISA) and Medicare Part D. The law was widely considered to have aided independent pharmacies in competing with larger networked pharmacies. The Eighth Circuit sided with the PBMs holding the Arkansas statute was preempted by ERISA and Medicare Part D. The ruling advances a policy of preventing states from imposing costly mandates that affect employers, unions, public programs and consumers by raising the costs of drugs.

Pharmaceutical Care Management Association v Rutledge