Plain-English summary
Court allows Arkansas law curbing PBM reimbursements to stand; not preempted by ERISA
The Court ruled that Arkansas’ Act 900—which stops pharmacy benefit managers (PBMs) from reimbursing pharmacies below their wholesale cost—is not preempted by the Employee Retirement Income Security Act (ERISA). The decision returns the case to the lower court for further proceedings consistent with the ruling.
Why this matters
Millions of Americans rely on prescription drug coverage arranged by employers or other plans that use PBMs. This ruling means states have more room to regulate PBM business practices that affect how much pharmacies are paid and, indirectly, how much plans and patients pay for drugs. It also limits the reach of ERISA preemption when states enact laws that regulate insurance-adjacent intermediaries rather than directly interfering with employer plan structures.
Who may feel it
- Patients who fill prescriptions through employer health plans and other plans using PBMs
- Retail and independent pharmacies whose reimbursements can be affected by PBM rules
- Pharmacy Benefit Managers (PBMs) and health plans that contract with PBMs
- State governments considering laws to regulate PBMs
Key questions
- Does ERISA preempt state laws that regulate pharmacy benefit managers’ reimbursement practices?