In a recent, much-anticipated judgement given on August 15, 2023, the Tenth Circuit Court decided the PCMA v. Mulready case, rejecting Oklahoma’s argument that its pharmacy network requirements were not preempted by ERISA (The Employee Retirement Income Security Act). A detailed report on this judgment can be found in an article in JD Supra.
The case has gained significant attention from plan sponsors, pharmacy benefit managers, health insurance issuers, and third-party administrators. The reason for this interest is not just the state regulation of pharmacy benefit managers (PBMs), but also the reaffirmation of ERISA’s preemption. At the heart of the matter is the objective of ERISA to ensure that employer-sponsored plan regulation remains primarily a federal concern.
The court’s ruling may have influence on the way the pharmacy industry operates and adjust its protocols to conform with ERISA. Pharmacy benefit managers – the primary determinants of which prescriptions are covered by insurance – will likely see the potential scope of ERISA’s preemption extend.
This turn of events underlines the importance of ERISA’s role in state regulation, reaffirming its supremacy over state laws that might affect the administration of employer-sponsored plans. The ERISA preemption doctrine, which has been the subject of substantial litigation, continues to draw attention with the latest Tenth Circuit decision.
The development is a vivid example of the ongoing dialogue in the courts regarding the reach and limits of ERISA preemption. As this determination has significant implications for the future of state regulations around insurance and healthcare, legal professionals and corporate entities await further movements in ERISA’s preemption boundaries.