{"ID":63214,"name":"Rutledge v. Pharmaceutical Care Management Association","href":"https:\/\/api.oyez.org\/cases\/2020\/18-540","view_count":0,"docket_number":"18-540","additional_docket_numbers":null,"manner_of_jurisdiction":"Writ of \u003Ci\u003Ecertiorari\u003C\/i\u003E","first_party":"Leslie Rutlege, Arkansas Attorney General","second_party":"Pharmaceutical Care Management Association","timeline":[{"event":"Granted","dates":[1578636000],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/54639"},{"event":"Argued","dates":[1601960400],"href":"https:\/\/api.oyez.org\/case_timeline\/case_timeline\/54760"}],"lower_court":{"ID":13,"name":"United States Court of Appeals for the Eighth Circuit","href":"https:\/\/api.oyez.org\/taxonomy\/term\/13"},"facts_of_the_case":"\u003Cp\u003EIn 2015, the legislature of Arkansas passed a law regulating the conduct of pharmacy benefits managers (\u0022PBMs\u0022)\u2014the entities that serve as intermediaries between health plans and pharmacies\u2014in an attempt to address the trend in that state of significantly fewer independent and rural-serving pharmacies. PBMs perform numerous functions in this rule, including creating a maximum allowable cost (\u0022MAC\u0022) list which sets reimbursement rates to pharmacies dispensing generic drugs. As a result of contracts between PBMs and some pharmacies, some other pharmacies might actually lose money on a particular prescription transaction. The Act sought to address this and other situations where the conduct of PBMs could cause harm to pharmacies.\u003C\/p\u003E\n\u003Cp\u003EPharmaceutical Care Management Association (PCMA), a pharmacy trade association, filed a lawsuit on behalf of its members claiming, among other arguments, that Arkansas Act 900 is preempted by both ERISA and Medicare Part D. The district court found that ERISA did preempt some portions of the Act but that Medicare Part D did not preempt the Act.\u003C\/p\u003E\n\u003Cp\u003EOn appeal, the U.S. Court of Appeals for the Eighth Circuit affirmed in part and reversed in part, finding that Act 900 was preempted by both ERISA and Medicare Part D. The appellate court noted that ERISA broadly preempts \u0022any and all State laws insofar as they may now or hereafter relate to any employee benefit plans.\u0022 Because Act 900 \u201cboth relates to and has a connection with employee benefit plans,\u201d ERISA preempts it.\u003C\/p\u003E\n","question":"\u003Cp\u003EDoes ERISA preempt an Arkansas law regulating pharmacy benefit managers\u2019 drug-reimbursement rates?\u003C\/p\u003E\n","conclusion":"\u003Cp\u003EArkansas\u2019s Act 900 is not pre-empted by ERISA. Justice Sonia Sotomayor authored the unanimous (8-0) opinion of the Court. ERISA pre-empts state laws that relate to a covered employee benefit plan. A state law \u201crelates to\u201d a covered plan if it has \u201ca connection with\u201d or \u201creference to\u201d such a plan. Act 900 has neither. Act 900 lacks a connection with an ERISA plan because it is merely a form of cost regulation and does not dictate plan choices. Additionally, it does not \u201cact immediately and exclusively on ERISA plans\u201d; although it affects some ERISA plans, it regulates those plans only incidentally, as part of its regulation of PBMs generally.\u003C\/p\u003E\n\u003Cp\u003EJustice Clarence Thomas joined the majority in full \u201cbecause it properly applies our precedents\u201d regarding the pre-emptive effect of ERISA but wrote a separate concurring opinion to express doubt about the Court\u2019s ERISA pre-emption jurisprudence, claiming that it \u201cveer[s]\u201d from the text of the Act.\u00a0\u003C\/p\u003E\n\u003Cp\u003EJustice Amy Coney Barrett took no part in the consideration or decision of this case.\u003C\/p\u003E\n","advocates":[{"advocate":{"ID":63263,"name":"Nicholas J. 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