The U.S. Court of Appeals for the District of Columbia has struck down a district law that would have designated pharmacy benefit managers as fiduciaries.
The court ruled that key portions of the law, Title II of the DC AccessRx Act of 2004, are unconstitutional.
“This ruling ... allows PBMs to continue to work aggressively to reduce the costs and improve the quality of prescription drug benefits for the 200 million Americans they serve,” said Mark Merritt, president and CEO of the Pharmaceutical Care Management Association.
A three-judge panel unanimously affirmed a 2009 District Court ruling, finding that, “since PBMs engage in claims administration for their clients and are regulated exclusively by Federal ERISA law, states and municipalities cannot impose such requirements.”
According to officials, the law never went into effect, as a result of an immediate injunction issued by a lower court and subsequent court rulings.
The court specifically rejected a contrary holding, related to a “nearly identical” Maine statute issued by another appeals court, stating that “in our view the uniform administrative scheme encouraged by ERISA includes plan administrative functions performed by a third party on behalf of an EBP (employee benefits plan).”
Dozens of states have rejected legislation imposing similar requirements on PBMs after officials realized that such proposals inadvertently raise, rather than reduce, prescription drug costs.