National Implications in Iowa's Win Over PBMs

Posted Feb. 24, 2015

Iowa's MAC transparency law, which the PBM/mail order lobby challenged in court in hopes using a victory to attack similar laws in other states, emerged intact last week. On Feb. 18 the U.S. District Court for the Southern District of Iowa issued an initial victory for Iowa by granting the state's motion to dismiss the bulk of the claims challenging the law. The Pharmaceutical Care Management Association, representing 11 PBMs, claimed that the 2014 law was preempted by ERISA, constituted an illegal taking by the state of PBM trade secrets, and violated the dormant commerce clause of the Constitution. Iowa sought dismissal of the ERISA and takings claims, and the court sided with the state in rejecting PCMA's arguments with respect to these claims.

 

The Iowa Pharmacy Association and NCPA supported Iowa's insurance commissioner and attorney general in their defense of the law. The landmark law regulates how PBMs manage MACs (Maximum Allowable Costs). Among the provisions is a requirement that PBMs include in their contracts information regarding which of the national compendia they use to obtain pricing data for calculating MAC prices and a process that allows a pharmacy to comment on, contest, or appeal the MAC reimbursement amounts or the MAC list. Importantly, the court concluded that such provisions are not preempted by ERISA.

 

From NCPA eNews Weekly