NGA Applauds SCOTUS Decision on Arkansas Regulation of Pharmacy Benefit Managers

December 10, 2020

Ruling validates lengthy battle to limit power of PBMs

The National Grocers Association (NGA), the trade association representing the independent supermarket industry, applauds the Supreme Court of the United States in its ruling in Rutledge v. Pharmaceutical Care Management Association (PCMA) to determine whether community pharmacies are protected from abusive payment practices.

The unanimous (8-0) decision ruled in favor of the interests of patients and community pharmacies, who have been fighting for years to regulate pharmacy benefit managers (PBMs).

“Many independent grocery pharmacies have been forced to close their doors over the last few years due to the unfair practices of PBMs. We are glad that the Supreme Court has affirmed the authority of Arkansas and other states to regulate onerous PBM practices,” said Greg Ferrara, NGA president and CEO. “NGA continues to work with Congress and federal agencies to advance pharmacy reforms at a national level that protect patient access and allow independent grocery pharmacies to continue to serve their communities.”

PBMs are middlemen that manage prescription drug benefits for health insurers, Medicare Part D drug plans and large employers. With this ruling by the court, states will have greater authority to protect local pharmacies and their patients from PBM overreach.

At issue was the extent to which the federal Employee Retirement Income Security Act of 1974 (ERISA), which regulates private employee benefit plans, pre-empts states from regulating the amount that PBMs pay pharmacies to dispense prescription drugs that are covered by employer-sponsored health plans.