TPA Files Court Brief Supporting Louisiana PBM Law

The Texas Pharmacy Association is among four pharmacy advocacy groups that filed a court brief today in support of a Louisiana law requiring pharmacy benefit managers (PBMs) administering Medicare Part D plans to reimburse pharmacies a 10-cent provider fee. TPA joined the National Community Pharmacists Association, American Pharmacies, and Pharmacists United for Truth and Transparency in filing the brief in the U.S. Court of Appeals for the 5th Circuit, which includes Texas.

The case, Louisiana Independent Pharmacists Association v. Express Scripts, is the first test of a recent decision by the 8th Circuit Court of Appeals allowing North Dakota and other states in the jurisdiction to regulate PBMs. The Louisiana case would confirm the right of Texas, Louisiana, and Mississippi to curb PBM practices that are driving community pharmacies to the brink of collapse.

"Texas pharmacists are proud to support our neighbors in Louisiana," said Texas Pharmacy Association CEO Debbie Garza, R.Ph. "Texas enacted groundbreaking PBM reform legislation this year to help protect pharmacies and ensure patient choice. Community pharmacies have been under attack due to predatory business practices at the hands of PBMs, and it is critical for states to have the power to provide reasonable safeguards against PBM overreach."

Express Scripts, owned by the health insurance company Cigna, is one of the three largest pharmacy benefit managers in the country that collectively control nearly 80 percent of all prescriptions. Until recently they’ve been allowed to operate with very little oversight by the federal government or the states. In December 2020, the U.S. Supreme Court ruled unanimously in Rutledge v. PCMA that ERISA does not prohibit states from regulating PBMs. The North Dakota decision in PCMA v. Wehbi rendered on Nov. 17, 2021, affirmed the Supreme Court’s decision and confirmed that in some circumstances states may regulate PBMs in Medicare Part D.

For years, PBMs avoided regulation at the state level under the guise of federal preemption. The U.S. Supreme Court opened the door for states to act to rein in PBMs specifically relating to self-funded plans, which make up a large percentage of patients. The Louisiana case would apply similar reasoning and test whether states have the authority to regulate certain PBM activities in relation to Medicare Part D.