Pharmacists victorious after PBM lawsuit dismissed

A federal district court in Iowa recently dismissed the entire case brought by the Pharmaceutical Care Management Association (PCMA) challenging the legality of a transparency law regarding pharmacy benefit managers (PBMs).

Last year, Iowa legislators unanimously passed H.F. 2297. In February, the federal court rejected many of the claims PCMA had made about ERISA with respect to PBM transparency law.  In a strongly worded opinion, the court dismissed the remaining claims.

The court “granted Iowans and the community pharmacists who care for them a significant victory in defense of common-sense transparency legislation related to generic drug pricing and reimbursement,” B. Douglas Hoey, RPh, CEO, of the National Community Pharmacists Association (NCPA) said. “The cost of many generic drugs has skyrocketed by 1,000% or more virtually overnight, but PBM corporations may wait months before they update reimbursement rates. This situation forces pharmacies to absorb losses of $100 or more per prescription and jeopardizes patients’ access to medication.”

“We applaud the federal district court’s ruling to dismiss the remaining claims in this lawsuit. The judge clearly ruled that states do have a right to pass legislation to protect the citizens of their states,” Lonny Wilson, CEO of Pharmacy Providers of Oklahoma (PPOK), told Drug Topics. “We are very hopeful that this will help curb further frivolous lawsuits by PCMA and PBMs in other states.”

Wilson said pharmacists will fight back when PBM pricing and reimbursement is unfair, noting the recent example of Kmart suing PBM Catamaran over alleged violations on reimbursing its pharmacies for drug costs. “You push us into the corner, and these things happen,” Wilson said.

Meanwhile, the Iowa court concluded that the state has a legitimate interest in regulating PBMs in order to preserve the health of its citizens, Hoey said. “The court’s dismissal of PCMA’s entire case should serve as an extremely helpful precedent against PCMA’s claims challenging the legality of similar transparency laws throughout the country and in support of states’ ability to regulate PBMs,” he said.