A big win for PBMs (and self-funded health plans) in Oklahoma appeals court ruling

Legal analysists are calling a recent court ruling a win for pharmacy benefit managers (PBMs) and self-funded health insurance plans, with an appeals court ruling that PBM structures such as requiring the use of mail-order pharmacies cannot be restricted by state law.

The case, Pharmaceutical Care Management Association (PCMA) v. Mulready, centered on Employee Retirement Income Security Act of 1974 (ERISA) and its preemption of state laws. ERISA allows the federal government to set uniform standards for retirement and health plans in the country, avoiding a patchwork quilt of health care regulations.

However, there is debate on how much ERISA covers in the complex field of health care regulation, and states have been fighting to impose some regulations in areas where innovations have taken place, such as the partnerships between self-funded plans and PBMs. In an earlier ruling, the U.S. District Court for the Western District of Oklahoma had ruled that the challenged provisions of Oklahoma’s 2019 Patient’s Right to Pharmacy Choice Act were not preempted by ERISA.