ALEXANDRIA, Va. – Pharmacy organizations are applauding a decision by the Eighth Circuit of the U.S. Court of Appeals today that supports North Dakota’s right to regulate pharmacy benefit managers. The case, Pharmaceutical Care Management Association v. Wehbi, is the first to consider

at the federal appellate level the scope of the U.S. Supreme Court’s unanimous decision last year in Rutledge v. PCMA, which upheld an Arkansas state law regulating the abusive practices of PBMs. (PCMA is a trade association for pharmacy benefit managers; Nizar Wehbi is the North Dakota State Health Officer.)

In July, the National Community Pharmacists Association, the American Pharmacists Association and the North Dakota Pharmacists Association, along with the pharmacy associations of six additional states within the jurisdiction of the Eighth Circuit, filed a friend of the court (amicus curiae) brief defending North Dakota’s position in this case. Oral arguments (audio recording available here) were held on Sept. 1, 2021.

“With this decision the Eighth Circuit is starting to right its previous wrongs, affirming how states can use Rutledge to appropriately regulate health care’s mega-middlemen and protect citizens from harmful PBM business practices,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “We applaud North Dakota for pursuing PBM reforms through legislation and, when necessary, litigation. These fights may continue, but policymakers considering similar PBM restrictions can take comfort in the fact that courts are recognizing states’ obligation to protect patients and local businesses and upholding their efforts to do just that.”

“This is an important victory for patients and the pharmacists who serve them,” said Scott J. Knoer, MS, PharmD, FASHP, executive vice president and CEO of the American Pharmacists Association. “The curtain is finally being pulled away from PBMs and their unethical activities. For too long, they have been costing patients and taxpayers billions of dollars, negatively impacting patient health.”

“We are humbled by all the support and determination from everyone involved in this fight over the past five years. We are grateful the Eighth Circuit saw the light and realized protecting employers, patients, and the profession of pharmacy is more important than padding the pockets of the PBM industry,” said NDPhA EVP Mike Schwab. “We cannot say thank you enough to our State Board of Pharmacy, our Attorney General’s office, the North Dakota Legislature, our national colleagues, and our members for fighting the right fight! As a profession, we will continue to fight for our patients and the communities we serve.”

The Eighth Circuit decision has implications far beyond North Dakota. Most states are actively seeking to regulate PBMs. The ruling today clears the way for all states to regulate many PBM practices that PCMA argued were exempted by ERISA. Additionally, the court found that certain PBM practices within Medicare can also be regulated by the states.