AG Becerra Leads Bipartisan Coalition in Defending States’ Rights to Regulate the Rising Cost of Prescription Drugs

SACRAMENTO November 21, 2018 – California Attorney General Xavier Becerra, leading a bipartisan coalition of 32 Attorneys General, filed an amicus brief in the United States Supreme Court supporting states’ rights to regulate and address the rising cost of prescription drugs. In Rutledge v. Pharmaceutical Care Management Association, the Attorneys General argue that in order to protect the well-being of consumers, States must regulate pharmacy benefit managers, also known as PBMs. PBMs act as gatekeepers between pharmacies, drug manufacturers, health insurance plans, and consumers for access to prescription drugs. The brief filed today argues that regulation of the prescription drug market, including PBMs, is a critical tool for States to address access and affordability of prescription drugs and protect residents.

“At the California Department of Justice, we’re fighting so all Californians can access lifesaving healthcare – that means ensuring that the prescription drugs they rely on are affordable and accessible,” said Attorney General Becerra. “As drug prices continue to rise, States continue to lead the fight against pharmaceutical middlemen who pad their pockets on the backs of consumers. States must be able to continue this fight for lower prescription drug costs.”

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In 2015, the state of Arkansas implemented a law that regulated PBMs by setting standards for generic drug prices. Under the law, PBMs must raise their reimbursement rate for a drug if that rate falls below the pharmacy’s wholesale costs. The law also created an appeals process for pharmacies to challenge these reimbursement rates. The law was challenged by the Pharmaceutical Care Management Association, who argued that the Employment Retirement Income Security Act (ERISA) prevents the State of Arkansas from implementing the law. Arkansas has asked the Supreme Court to hear the case.

In today’s filing, the Attorneys General argue that state laws regulating pharmacy benefit managers are not restricted by federal law. Regulation is critical to the states’ ability to improve the transparency of prescription drug marketplaces and to protect consumers’ access to affordable prescription drugs, especially those in underserved, rural and isolated communities. In addition, the Attorneys General assert that the regulation of pharmacy benefit managers promotes healthcare access and affordability for residents – taking away a State’s ability to regulate would create confusion and uncertainty in the market and harm patients.

Joining Attorney General Becerra in filing today’s brief are the attorneys general from Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Texas, Utah, Vermont, Virginia, Washington, Wyoming, and the District of Columbia.

A copy of the brief is available here.