preemption

In a unanimous decision the U.S. Supreme Court held in Rutledge v. Pharmaceutical Care Management Association that states may regulate the price at which pharmacy benefit managers (PBMs) reimburse pharmacies for the cost of prescription drugs without violating the Employee Retirement Income Security Act (ERISA).  

PBMs act as an intermediary between prescription-drug plans and pharmacies. When a pharmacy fills a prescription the PBM reimburses...

Unless something surprising happens, Judge Amy Coney Barrett is expected to take the bench before the Supreme Court hears the most recent challenge to the constitutionality of the Affordable Care Act on November 10. But before she is confirmed the Court will hear 10 cases in its October siting with only eight Justices on the bench.

At least four of those cases are of interest to states and local governments. The State and Local Legal Center (SLLC)...

History will remember Justice Ginsburg as a glass ceiling smasher, a feminist, a liberal, a dissenter, and an icon. States and local governments will also remember something subtler about her which was more visible in the Court’s lower profile cases. And that was her pragmatism.

Perhaps the most important case for states and local governments where Justice Ginsburg demonstrated this quality is South Dakota v. Wayfair. She was the sole liberal...

In a 5-4 decision in Kansas v. Garcia the Supreme Court held that the Immigration Reform and Control Act (IRCA) does not preempt state statutes that provide a basis for identity theft prosecutions when someone uses another person’s Social Security Number on their state and federal tax-withholding forms.

The IRCA requires employers to verify, using a federal work-authorization form, that an employee is authorized to work in the United States....

In Rutledge v. Pharmaceutical Care Management Association the Supreme Court will decide whether states’ attempts to regulate pharmacy benefit managers’ (PBMs) drug-reimbursement rates are preempted by the Employee Retirement Income Security Act (ERISA).

PBMs are an intermediary between health plans and pharmacies. Among other things, they set reimbursement rates to pharmacies dispensing generic drugs. Contracts between PBMs and pharmacies create pharmacy networks. According to the Eighth Circuit, “[b]ased upon these contracts and in order to participate in a preferred network, some pharmacies choose to accept lower reimbursements for dispensed prescriptions.” So, in some instance pharmacies lose money.

Arkansas passed a law requiring that pharmacies “be reimbursed for generic drugs at a price equal to or higher than the pharmacies’ cost for the drug based on the invoice from the wholesaler.”

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