Federal Court Upholds Challenge to Arkansas Law that Forces Employers and Consumers to Pay Drugstores Higher Rates

Dec 01, 2015, 13:00 ET from Pharmaceutical Care Management Association

WASHINGTON, Dec. 1, 2015 /PRNewswire-USNewswire/ -- A federal court has denied the state of Arkansas' motion to dismiss a lawsuit filed by the Pharmaceutical Care Management Association (PCMA) challenging the constitutionality of Arkansas 900, a new law that forces employers and consumers to pay drugstores higher rates for generic drugs. 

"This favorable ruling means Arkansas must now defend a law that raises health care costs for employers and consumers," said PCMA President and CEO Mark Merritt.

The court upheld each of PCMA's allegations in the face of the state's motion, thus allowing PCMA to:

  • Demonstrate how the Arkansas law is preempted by two federal laws: ERISA, the federal law regulating health benefits plans, and Medicare Part D;
  • Demonstrate how the law imposes an unconstitutional burden on interstate commerce and would increase drug costs for the state's insurers, employers, and consumers; and
  • Demonstrate how the law allows pharmacies to violate existing contractual obligations. For example, the law allows pharmacies to refuse to fill consumers' prescriptions.

Arkansas is the only state with a law that offers such a "blank check" to drugstores. The law forces employers to pay drugstores more for prescription drugs and removes incentives for them to dispense lower-priced options when available.

PCMA is the national association representing America's pharmacy benefit managers (PBMs).  PBMs administer prescription drug plans for more 253 million Americans who have health insurance from a variety of sponsors including: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), state government employee plans, managed Medicaid plans, and others.

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SOURCE Pharmaceutical Care Management Association