Foley Hoag Assists PCMA Obtain 8th U.S. Circuit Court of Appeals Victory

Federal Circuit Court unanimously rules Arkansas state statute was pre-empted by ERISA and Medicare Part D

June 14, 2018

Foley Hoag LLP successfully represented client Pharmaceutical Care Management Association (PCMA) in a lawsuit in which the firm sought to invalidate Arkansas law Act 900, which restricted pharmacy benefit management (PBM) tools and required employers and consumers to pay higher rates to independent drugstores for prescription drugs. The victory was awarded in a unanimous three judge decision in the Eighth United States Circuit Court of Appeals.

The decision strikes down Act 900 for Medicare Part D drug plans, reversing a lower court’s ruling. The appeals court also upheld the lower court's earlier decision, in favor of PCMA, which held that the law was preempted by the Employee Retirement Income Security Act (ERISA).

“We are extremely pleased the court has ruled in favor of our client, PCMA,” said Thomas Barker, partner and co-chair of Foley Hoag’s healthcare practice. “High drug prices are one of the biggest healthcare issues impacting consumers across the country and pharmacy benefit management tools can play a critical part in reducing those costs. This ruling sends a clear message that state laws must also be part of the solution rather than inflict expensive mandates on employers, unions, and patients.”

Enacted in 2015, Act 900 mandated that PBMs reimburse pharmacies for generic drugs at a price equal to or higher than the price listed on the pharmacies invoice from the wholesaler and authorized pharmacies to refuse to dispense needed medications to seniors and other Arkansans if reimbursement was below that price.

The Foley Hoag team representing PCMA was led by partner Dean Richlin, and was comprised of Barker, partner Kristyn Bunce DeFilipp, and associates Andrew London and Ross Margulies.

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