The National Community Pharmacists Association (NCPA), the American Pharmacists Association (APhA), and the Tennessee Pharmacists Association (TPA) have filed a joint amicus brief in federal court supporting Tennessee’s 2021 law regulating pharmacy benefit managers (PBMs). The law includes measures to prevent PBMs from steering patients to affiliated pharmacies and from excluding certain pharmacies from preferred networks.
McKee Foods, known for products like Little Debbie snacks, challenged the law, arguing that it is preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA). A district court previously granted McKee Foods an injunction against the law. The case is now before the federal Sixth District Court of Appeals, where the three pharmacy organizations are backing Tennessee’s position.
In their brief, the organizations state: “Because PBMs owe fiduciary duties only to their shareholders, not the plans that they purport to serve, PBMs have incentives to engage in business practices that can harm plans, patients, and pharmacies. In the absence of regulation, PBMs have done just that.”
The brief outlines several practices attributed to PBMs that states like Tennessee aim to address through regulation.
“PBMs routinely steer patients to their own affiliated pharmacies, and they routinely reimburse their own affiliated pharmacies more than they reimburse their competitors, which are often small, family-run, independent pharmacies,” said NCPA General Counsel Matthew Seiler. “Nearly every state in the country has enacted, or is trying to enact, PBM reform to curb these abuses. Patients in Tennessee should have access to the health care providers they trust.”
“It’s simple: pharmacies should not lose money when they dispense life-saving prescriptions. Until PBMs change their reimbursement practices to provide fair compensation to pharmacies for the medications as well as the professional services provided by pharmacists, APhA will continue to fight for reform of their practices. The U.S. Supreme Court has already unanimously ruled the states have a right to regulate the PBMs, including allowing pharmacies to participate in networks with favorable reimbursement terms,” said APhA Executive Vice President and CEO Michael D. Hogue.
“Tennessee has led the nation in advancing meaningful PBM reform—and recent state audits confirm why those laws are necessary. The McKee Foods case threatens the state’s authority to protect patients, providers, and employers from abusive PBM practices. TPA fully supports Tennessee’s effort through this amicus brief and defends its right to enforce laws that ensure transparency, accountability, and fairness in the prescription drug market,” said TPA chief executive officer Anthony Pudlo.
Further information about each organization can be found at www.ncpa.org for NCPA; www.pharmacist.com for APhA; and www.tnpharm.org for TPA.
Alerts Sign-up