Both sides in a federal lawsuit challenging a 2015 law that governs how pharmacists in Arkansas are reimbursed for dispensing generic drugs filed motions this week asking Chief U.S. District Judge Brian Miller to decide the case in their favor without the need for a trial.
On Nov. 25, Miller refused to enter a preliminary injunction to halt the enforcement of Act 900 of 2015, saying the challengers, a national trade organization representing the 11 largest pharmacy benefits managers in the country, hadn't demonstrated a need to immediately stop the law's enforcement.
But in refusing to preliminarily dismiss the lawsuit that the Pharmaceutical Care Management Association filed Aug. 13, 2015, against the state, Miller left open the possibility of an eventual permanent injunction if he ultimately agrees that the law has an impermissible connection with the Employment Retirement Income Security Act of 1974, known as ERISA, among other things.
At issue is the law that took effect on July 22, 2015, and is codified as Arkansas Code Annotated 17-92-507. The Pharmaceutical Care Management Association, which represents benefits managers for insurance companies and other health plans, contends that it was quickly pushed through the Arkansas Legislature as a means for pharmacists to make more money at the expense of the plans, resulting in higher costs for the plans and patients.
The law requires benefits managers to reimburse pharmacies at or above the cost the pharmacy paid for generic drugs from a wholesale supplier, instead of using "maximum allowable costs" lists.
The maximum allowable costs lists, according to the benefits managers, are "crucial in developing a nationally established network of pharmacies that health plans, including ERISA plans, use to guarantee their participants will fill their drug prescriptions at certain set prices."
The benefits managers say that by allowing pharmacists in Arkansas to decline to fill plan participants' drug prescriptions at the set prices, the Arkansas law disrupts the uniformity provided by the managers' network of pharmacies, on which they rely.
Pharmacists, however, say the law was needed to stop benefits managers from shorting them on reimbursements by using cost lists with outdated prices.
Assistant Attorney General Shawn Johnson contends that Act 900 is not pre-empted by the retirement-security act or the Medicare Modernization Act of 2003. He also said in his motion for summary judgment that the law "was designed to preserve the delivery of pharmaceutical health care in Arkansas and any resulting lost profits to PBMs [pharmacy benefits managers] are insufficient to constitute an impermissible burden on interstate commerce."
The benefits managers noted that there are 1,515 wholesalers licensed to sell prescription drugs in Arkansas, and that they don't charge all pharmacies the same price for the same drugs, depending on factors that include the purchasing volume, whether the pharmacy buys from that wholesaler exclusively and the pharmacy's creditworthiness.
Out of Arkansas' roughly 3 million residents, about 1.76 million of them have prescription drug coverage provided by benefits managers, about 1.3 million receive prescriptions through an employment-based benefits plan and about 375,000 receive prescriptions through a Medicare Part D plan, according to the plaintiffs' 36-page brief.
Metro on 08/18/2016