A federal judge heard oral arguments Friday on motions for summary judgment in a lawsuit challenging an Arkansas law on pharmaceutical reimbursements.
Attorneys for the Pharmaceutical Care Management Association and attorneys for the Arkansas each filed motions for summary judgment requesting that U.S. District Judge Brian Miller rule in their favor. Miller said Friday that he would respond to the motions at a later date.
Pharmaceutical Care Management Association, a Washington, D.C., trade organization for pharmacy benefits managers, filed a lawsuit against the state in August 2015 over Act 900 of 2015, which required pharmacy benefits managers to reimburse pharmacists at or above the amount it cost the pharmacies to obtain the drug instead of based on a "maximum allowable cost list."
The law, sponsored by state Sen. Ronald Caldwell, R-Wynne, also permitted pharmacists to decline to sell a drug if they found the reimbursement to be less than the pharmacy's cost of acquiring the drugs.
The law is similar to a bill introduced in Congress earlier this year and to laws passed in 24 states, according to the National Community Pharmacists Association of Alexandria, Va.
Proponents of the laws say they help keep pharmacy benefits managers from shorting pharmacies on reimbursements by using outdated costs on the "maximum allowable cost list." Opponents of the law say the set price lists help keep plans uniform within the managers' network of pharmacies.
Miller said Friday that he didn't usually schedule oral arguments on motions for summary judgment, which are requests to have a case decided expeditiously, but that the importance of the law to Arkansas consumers prompted him to hold oral arguments.
Dean Richlin, an attorney for the Pharmaceutical Care Management Association, said Act 900 interferes with pharmacy benefits managers' attempts to keep prices down, would give pharmacies more money, goes against federal law, seeks to solve a problem that may not exist, and improperly impacts interstate commerce by implicating out-of-state residents who may need a prescription filled here or Arkansas residents who may need a prescription filled out-of-state.
Shawn Johnson, an attorney with Arkansas Attorney General Leslie Rutledge's office, said the insufficient reimbursements that comprise about 10 percent of all pharmaceutical reimbursements harm independent pharmacies. Of the 452 independent pharmacies that existed in Arkansas in 2006, 57 have closed, he said.
Further, Johnson argued, Act 900 isn't pre-empted by federal law because it doesn't directly affect prescription-drug benefit plans.
Prescription-drug benefit plans are tied to pharmacies through networks that pharmacy benefits managers help set up. The federal Employee Retirement Income Security Act, passed in 1974, pre-empts any state laws that relate to benefit plans.
"[Act 900] would be meaningless without benefit plans," Richlin countered.
Richlin also argued that independent pharmacies closing doesn't necessarily indicate something bad. Richlin said more than 40 chain or mass-merchandiser pharmacies had opened in the past 10 years. Further, he said, there has been no evidence of a pharmacy shortage because there is no evidence the local access requirement under Medicare Part D -- which requires drugs to be available to customers within a certain radius -- isn't being met.
Johnson argued that independent pharmacies are less able to cope with negative reimbursements than chain or mass-merchandiser pharmacies, likely leading to their closure. Even Wal-Mart, Johnson said, cited negative reimbursements as taking a toll on the company's profit margins.
"Pharmacists have repeatedly made it clear that they are struggling with negative reimbursements," Johnson said.
Attorneys for both sides recalled just one instance since Act 900 took effect July 22, 2015, of a pharmacist refusing to fill a prescription. The pharmacy he worked for was removed from the prescription-drug benefit plan network, and the episode resulted in a lawsuit that attorneys were unsure of the status of Friday.
Metro on 11/05/2016