Golden State Today

California Attorney General Rob Bonta has joined a bipartisan coalition of 32 attorneys general in urging the U.S. Supreme Court to affirm states' authority to regulate pharmacy benefit managers (PBMs). The coalition submitted an amicus brief requesting the court to review a decision by the U.S. Court of Appeals for the Tenth Circuit, which found that federal laws preempt Oklahoma's PBM regulations.

“It is simply unacceptable that Americans cannot afford lifesaving drugs due to pharmaceutical prices that are soaring at an alarming rate,” said Attorney General Bonta. “States have the responsibility to regulate these deliberate, unfair, and deceptive pricing tactics set by PBMs that allow them to line their own pockets at the expense of consumers.”

PBMs serve as intermediaries in the prescription pharmaceutical industry, operating between prescription-drug plans, pharmacies, and drug manufacturers. They profit through fees charged to market participants and by reimbursing pharmacies less than what they receive from plans for dispensing medications. Critics argue that PBMs reduce competition, limit access to medications, and impose confidentiality requirements that restrict transparency.

In response to the lack of federal regulation, many states have enacted measures to protect consumers and pharmacies from PBM practices. Oklahoma's laws aim to ensure adequate pharmacy networks and prevent self-dealing among PBMs. These regulations require sufficient geographic coverage for PBM pharmacy networks and prohibit PBMs from denying preferred participation status to any willing pharmacy or excluding pharmacies based solely on employee probationary status. Additionally, PBMs are restricted from steering consumers toward specific in-network pharmacies.

The case in question stems from Pharmaceutical Care Management Association (PCMA) v. Mulready, where PCMA challenged Oklahoma officials by claiming that federal laws ERISA and Medicare Part D preempted Oklahoma’s regulations. Although a district court initially rejected PCMA’s claims, the Tenth Circuit later reversed this decision, leading Oklahoma to seek a review from the U.S. Supreme Court.

The coalition argues that clarity is needed on important federal law questions raised by this case, noting conflicts between the Tenth Circuit’s decision and previous Supreme Court rulings as well as decisions from other circuits like the Eighth Circuit.

Attorney General Bonta remains an advocate for state regulation of PBMs and broader healthcare industry practices. In January 2023, he filed a lawsuit against major insulin manufacturers over allegations of unlawful business practices inflating insulin costs. In October 2022, he supported Oklahoma's authority in regulating PBMs through an amicus brief filed with 35 other attorneys general in the Tenth Circuit.

Joining Attorney General Bonta in this recent brief are attorneys general from Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Louisiana, Maine, Maryland Massachusetts Michigan Minnesota Mississippi Nebraska Nevada New Hampshire New Jersey New York North Carolina Ohio Oregon Pennsylvania Rhode Island South Dakota Texas Utah Virginia Washington and the District of Columbia.

A copy of the brief can be found here.

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