Attorney General Curtis Hill this month joined a bipartisan coalition of 32 attorneys general in filing an amicus brief in the U.S. Supreme Court supporting states’ rights to regulate and address the rising cost of prescription drugs.
In Rutledge v. Pharmaceutical Care Management Association, the attorneys general argue that in order to protect the well-being of consumers, states must retain the right to regulate pharmacy benefit managers, also known as PBMs. PBMs act as gate-keepers among pharmacies, drug manufacturers, health insurance plans and consumers for access to prescription drugs. The brief filed this month argues that regulation of the prescription drug market, including PBMs, is a critical tool for states to address access and affordability of prescription drugs and protect residents.
In 2015, the state of Arkansas implemented a law that regulated PBMs by setting standards for generic drug prices. Under the law, PBMs must raise their reimbursement rate for a drug if that rate falls below the pharmacy’s wholesale costs. The law also created an appeals process for pharmacies to challenge these reimbursement rates. The law was challenged by the Pharmaceutical Care Management Association, which argued that the Employment Retirement Income Security Act (ERISA) prevents the State of Arkansas from implementing the law. Arkansas has asked the Supreme Court to hear the case.
“States must constantly safeguard their ability to act on behalf of their own citizens,” Attorney General Hill said. “Here in Indiana, we must step forward to protect policymaking prerogatives that rightfully rest with state government.”
In this month’s filing, the attorneys general argue that state laws regulating pharmacy benefit managers are not restricted by federal law. Regulation is critical to the states’ ability to improve the transparency of prescription drug marketplaces and to protect consumers’ access to affordable prescription drugs, especially those in underserved, rural and isolated communities. In addition, the attorneys general assert that the regulation of pharmacy benefit managers promotes healthcare access and affordability for residents and that taking away a state’s ability to regulate would create confusion and uncertainty in the market and harm patients.