Insight: Winter 2021

Winter 2021 | 7 HHS Secretary Nominee a Pharmacy Ally President Joe Biden has put the finishing touches on his Cabinet. The American Pharmacists Association (APhA) reports the president’s nominee for U.S. Department of Health and Human Services (HHS) is a friend to pharmacy. Former U.S. Representative and California Attorney General Xavier Becerra has been picked for the position and will go through the Senate confirmation process. The California Pharmacists Association (CPhA) staff met several times with Becerra’s staff at the California Department of Justice during his tenure to discuss PBM business practices. CPhA reports Becerra was one of the most responsive leaders to discuss issues. Source: APhA A U.S. Supreme Court ruling in mid-December 2020 could prove to be a big win for pharmacies battling with PBMs. The court’s opinion in Rutledge v. Pharmaceutical Care Management Association rejected an attack on state statutes that protect pharmacies from the prescription reimbursement intermediaries that health insurance providers use to administer prescription drug programs. The suit involved Arkansas Act 900, which regulates the price at which PBMs reimburse pharmacies for the cost of drugs covered by drug plans. The question before the court was whether the Employee Retirement Income Security Act (ERISA) of 1974 preempts the Arkansas law. Justice Sotomayor wrote the Supreme Court’s opinion, which was joined by all Justices except Justice Barrett, who did not participate in the decision, expressing the Court’s ERISA preemption tests have strayed from the text of ERISA’s statutory language. “State regulations that merely increase the costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage are not preempted by ERISA,” Justice Sotomayor wrote, citing earlier Supreme Court opinions. In many cases, the amount paid by the PBM is less than what it costs the pharmacy to buy and fill the prescription. PBMs typically use a maximum allowable cost list to determine how much pharmacies should be reimbursed. Trade groups for rural and independent pharmacies have argued that PBM’s strategies in reimbursement rates of maximum allowable costs are unfair and can be lower than pharmacies’ cost to purchase the drug. Source: SCOTUSblog Supreme Court Ruling Win for Pharmacies Over PBMs