Supreme Court Accepts Cert in PBM Preemption Case

The Supreme Court has just granted certiorari in another ERISA case—Pharm. Care Mgmt. Ass’n v. Rutledge, 891 F.3d 1109 (8th Cir. 2018). In Rutledge, the Eighth Circuit held that ERISA preempts an Arkansas’ statute regulating pharmacy benefit managers’ drug reimbursement rates with pharmacies. Following prior precedent, Eighth Circuit held that the statute “interfered with national [ERISA] plan administration” because PBM’s inevitably “administer benefits” for ERISA-governed group health plans.

The case should provide further clarity about the reach of ERISA’s opaque preemption clause—a subject that the Supreme Court has already had to address numerous times over the years. The case also will address what power local and state authorities have to regulate the health care payment market. The Arkansas statute was purportedly enacted to address a perceived lack of pharmacies in rural areas, and other local and state governments likely will attempt to pass similar laws. This case may define their power to do so.