AG Cameron Joins Bipartisan Coalition Supporting State Regulation of Abusive PBMs
Oklahoma's laws regulating PBMs are being challenged in a lawsuit by the PBM industry's national lobbying association, Pharmaceutical Care Management Association (PCMA).
"PBMs shouldn't get a pass on state-level regulation—especially in the face of soaring costs," said Attorney General Cameron. "We joined this amicus brief advocating for appropriate regulation of pharmacy benefit managers to protect consumers in Kentucky, Oklahoma, and across the nation."
PBMs are intermediaries in the pharmaceutical industry between prescription-drug plans, pharmacies, and drug manufacturers. PBMs are paid from fees charged to market participants and by reimbursing pharmacies less than the PBM is paid by plans for dispensing medications. PBMs profit by imposing self-serving protections that reduce competition, limit prescription medication access, and impose various confidentiality requirements.
In their brief, the coalition argues that states have the authority to protect their consumers by regulating businesses, like PBMs, within their respective states. The coalition writes, "states have an interest in preserving states' authority to regulate companies doing business in their states, protecting their residents' access to healthcare, and curbing abusive business practices. To advance these interests, nearly all states regulate pharmacy benefit managers. PCMA's broad approach to federal preemption, however, would "severely impede states' abilities to protect their residents and potentially upend licensing and regulatory structures in nearly every state."
The Oklahoma laws at issue address two key components of PBM business practices – ensuring pharmacy-network adequacy and curtailing PBM's self-dealing. More specifically, Oklahoma requires PBM's pharmacy networks to have sufficient geographic coverage, allow all in-network pharmacies to receive preferred-participation status if they meet the PBM's criteria for that status, prohibit network exclusion solely because a pharmacy employee may be on probationary status, and prohibit PBMs from incentivizing the use of particular (typically PBM-affiliated) in-network pharmacies.
Attorney General Cameron was joined by the attorneys general of Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Virginia, and Washington.
Read the brief here.