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Arkansas AG to defend PBM law at U.S. Supreme Court; state insurance department reports PBM enforcement results
Summary
Attorney General’s office said the U.S. Supreme Court granted review of Arkansas’s challenge over PBM regulation under ERISA; the insurance department reported 2019 enforcement actions including $202,928 recovered for pharmacists, a $50,000 fine against Express Scripts, and 17 licensed PBMs.
Arkansas Attorney General staff and the Insurance Department briefed the Senate Insurance & Commerce Committee on two related PBM matters: the U.S. Supreme Court’s decision to hear an appeal over Arkansas’s 2015 MAC law and the state’s 2019 PBM licensure enforcement outcomes.
Corey Cox, chief of staff to the attorney general, said the U.S. Supreme Court granted certiorari on the appeal of Act 900 (the 2015 maximum-allowable-cost statute). Cox told the committee the office expects oral argument in April and is preparing briefs and moot sessions with participating attorneys. He framed the issue narrowly as whether the state may regulate PBM reimbursement practices when federal ERISA rules are implicated.
Sean Johnson, an attorney in the AG’s consumer-protection division, and Cox said many states and entities have coordinated: ‘‘There were 32 states plus the District of Columbia’’ involved in the petition drive, and pharmacy groups and other states may submit amicus briefs in support, they said.
Ryan James, public information and government relations at the Arkansas Insurance Department, reported on 2019 PBM licensure enforcement under the PBM Licensure Act and related MAC/NADAC rules incorporated in 2019. The department received 71 complaints; many were closed because they involved ERISA plans or Medicare Part D (which the department lacks authority to regulate). The department said it recovered a total of $202,928 for complainants and collected a $50,000 fine from Express Scripts for a NADAC-related violation. James said Arkansas had 17 licensed PBMs at the start of 2020 and two additional applicants.
Committee members asked about outside counsel and amicus coordination; Cox said the attorney general’s office will argue the case using mainly in-house staff and will coordinate with other state AGs and outside amici as appropriate. No procedural vote was taken; the case remains pending at the U.S. Supreme Court.
