The case originated in 2015 when a trade group for PBMs filed a lawsuit arguing against an Arkansas law that regulates the reimbursement rates PBMs must pay to pharmacies. The law requires PBMs to reimburse pharmacies at or above the costs paid for wholesale generic drugs and prevents them from paying their own pharmacies more than what is paid to other ones. Retail pharmacies like CVS, for example, own both a PBM and pharmacies.
PBMs argued the law would make it more difficult to keep costs down, as pharmacies wouldn’t have as much incentive to purchase lower-cost medicines from wholesale drugmakers. The federal appeals court agreed in 2018.
“Abusive prescription drug reimbursement practices by PBMs have driven more than 16 percent of independent rural pharmacies from the healthcare marketplace, and in many communities, nothing has replaced them,” Arkansas Attorney General Leslie Rutledge wrote in an October 2019 brief calling for the Supreme Court to review the appeal court’s ruling.
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