In a recent decision, the Tenth Circuit ruled that the Employee Retirement Income Security Act of 1974 (ERISA) preempts provisions of an Oklahoma law regulating pharmacy benefit managers (PBMs) and pharmacy networks. This judgment offers a significant victory for self-funded health plans subject to ERISA.
The Tenth Circuit serves a jurisdiction that includes Oklahoma and five other states: Colorado, Kansas, New Mexico, Utah, and Wyoming. The ruling bears high importance as it sets a legal precedent over a broad swath of the Central and Western United States.
The Oklahoma statute under scrutiny aimed at regulating PBMs, intermediaries between insurers or self-insured employers, pharmacies and drug manufacturers. The legislation intended to control drug prices and ensure that pharmacies were reimbursed fairly for their services. The recent ruling, however, places this power back into the hands of ERISA-governed health plans.
This case is another exemplification of the continual efforts to clarify the balance between state and federal involvement in the regulation of health plans and PBMs. Similar disputes are being litigated across a variety of states, highlighting the national significance of this Tenth Circuit’s ruling.
For more details about this ruling, read the full report by Bass, Berry & Sims PLC on JDSupra.