A federal judge refused Wednesday to halt the enforcement of Act 900 of 2015, a law that governs how pharmacists in Arkansas are reimbursed for dispensing generic drugs, saying challengers haven't demonstrated the need for an "extraordinary remedy" in the form of a preliminary injunction.
In a written ruling, Chief U.S. District Judge Brian Miller said the Pharmaceutical Care Management Association, a national trade group that represents benefits managers for insurers and health plans, failed to show during a Nov. 4 hearing that without an injunction, the benefits managers will suffer irreparable harm -- a harm that is "both certain and great" and "not theoretical."
The trade group, which sought the injunction as part of its lawsuit challenging the law that took effect July 22, alleges that to comply with the law, benefits managers have to adopt an unprecedented, state-specific solution for pharmacy contracts in Arkansas; completely change their business model to apply the law's standards to the entire country; or stop doing business in Arkansas altogether. But, Miller said, "these are mere allegations of theoretical and unsubstantiated injuries that are not sufficient to warrant injunctive relief."
While denying the injunction request that would halt the law's enforcement until the lawsuit's allegations can be thoroughly aired, Miller refused to dismiss the lawsuit. He said in a separate order that the lawsuit "sufficiently alleges that Act 900 has an impermissible connection" with the federal Employment Retirement Income Security Act of 1974, known as ERISA.
Miller noted that the benefits managers argue that Maximum Allowable Costs lists, or MAC lists, are "crucial in developing a nationally established network of pharmacies that health plans, including ERISA plans, use to guaranty their participants will fill their drug prescriptions at certain set prices. Accordingly, by allowing pharmacists in Arkansas to decline to fill ERISA plan participants' drug prescriptions at these set prices, Act 900 disrupts the uniformity provided by the [benefits managers'] network of pharmacies and relied upon by the plans' managers."
He continued, "This may force [benefits managers] to create MAC lists specific to Arkansas, and in turn force ERISA plans to change their administration with regard to their participants filling prescriptions in Arkansas. These allegations sufficiently state a cause of action and the attorney general's motion to dismiss is therefore denied."
The benefits managers say the law was pushed through the state Legislature in the spring without any fanfare as a means for pharmacists to make more money at the expense of the insurance companies or government plans that the benefits managers administer. They say the new reimbursement method will result in higher costs for the plans and for consumers.
Pharmacists, however, say the law was long overdue. They say it is needed to stop benefits managers from shorting them on reimbursements by using Maximum Allowable Costs lists with outdated prices.
NW News on 11/27/2015