US Supreme Court Says No: States Can Regulate Drug Reimbursements Leaving PBMs in the Lurch

Updated: Apr 27

Thursday December 10, 2020 was the beginning of a change in the pharmacy benefits world as the US Supreme Court closed the case on a state’s ability to regulate PBMs’ reimbursement to pharmacies for drugs. The majority decision indicated that states have the authority to regulate pricing on pharmacy reimbursements, whether or not benefit plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA). This ruling ultimately clears the way for states to put restrictions on pharmacy benefit managers.


To Arxcel, this is another opportunity to see change in the PBM marketplace as it, again, exposes a potentially tumultuous, costly system. To put it plainly, the Supreme Court has given the states and employers better viability into the multibillion-dollar PBM industry. Now, states are open to look at regulations necessary to erase competitive advantages and increase fairness surrounding public health, returning the power to the employers and patients, not only the large PBMs.


It is important to note that each state, pursuing its own regulations, could ultimately make a move that will result in higher health care costs for consumers and employers. At Arxcel, our team believes that the focus should be on transparency and access to data for employers. It should not be on fighting for information that allows employers to accurately manage their PBMs. Additionally, we believe that drug reimbursements should be fair and accurate.


For now, no immediate impact is known for our clients and their employees, but we will be keeping a close eye on state regulations and their bearings on drug costs. As more information is released, you can be sure that the Arxcel team will communicate any and all pertinent information and offer our professional insight.


If you have any questions about the Supreme Court ruling, what it means for your pharmacy benefits program, or what regulations states are pursuing, please contact the Arxcel team today. We are dedicated to making the complex world of pharmacy benefits as simple as possible. Contact us today.