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- Title
The Great Divide: ERISA Integrity versus State Desire to Hold Pharmacy Benefit Managers Accountable for Pharmaceutical Drug Pricing.
- Authors
Stecker, Alexandra M.
- Abstract
This Note comments on a split circuit ruling that stems from an Iowa Court of Appeals case, Pharmaceutical Care Management Ass'n v. Gerhart, that focuses on the question, "Are state laws forcing pharmacy benefit managers (PBM) to disclose pricing data preempted by the Employee Retirement Income Security Act of 1974 (ERISA)?"1 The Eighth Circuit, as well as the D.C. Circuit, ruled that ERISA does preempt these reporting requirements. However, other circuits, like the First Circuit, have upheld the state law reporting requirements. This recent striking down of Iowa pharmaceutical law is troubling as the ruling embraces a lack of transparency and accountability as to how PBMs and insurance companies decide their drug prices. On one side, a state's law requiring reporting disclosure to state agencies (in addition to ERISA's national reporting requirements) is argued to put an economic burden on health insurance companies. On the other side, it is argued that state law forcing health insurers to report pricing data increases accountability and does not actually affect ERISA. This Note discusses the precedent leading up to this circuit split, the sides and rationales of the split, the circuit split's implications in health insurance law, why ERISA should not preempt states' laws requiring PBMs to report their pricing methodology for certain drugs, and recommends various solutions to avoid ERISA preemption, yet hold PBMs accountable for their drug pricing methods.
- Subjects
UNITED States; PHARMACEUTICAL Care Management Association; PHARMACY benefit management; STATE laws; DRUG laws; LAW
- Publication
Journal of Corporation Law, 2018, Vol 44, Issue 1, p171
- ISSN
0360-795X
- Publication type
Article