Supreme Court declines to hear PBM case

Modern Healthcare – Monday, June 30, 2025
By Nona Tepper

The Supreme Court on Monday declined to hear a case centering on how much states can regulate pharmacy benefit managers.

The high court rejected without comment an appeal by Oklahoma Insurance Commissioner Glen Mulready (R). In 2019, Oklahoma passed a law that would have regulated how PBMs construct pharmacy networks and steer patients to preferred retail locations. PBM trade group the Pharmaceutical Care Management Association sued to block the law, alleging Mulready overstepped his regulatory authority.

The Oklahoma law would have required PBMs to contract with any willing pharmacy and limited the ability of PBMs to steer consumers to retail locations owned by the same parent company. A week before the law was set to go into effect in 2019, the trade group sued, alleging the federal Employee Retirement Income Security Act of 1974 and Medicare Part D superseded the state’s ability to regulate PBM networking and contracting practices.

In 2022, a federal judge ruled that ERISA did not preempt the Oklahoma law’s provisions but that Medicare superseded some of the act’s requirements. PCMA appealed the decision to the 10th Circuit Court of Appeals, which ruled the law violated the constitution. Mulready petitioned the Supreme Court to review the case.

Thirty-four state attorneys general urged justices to hear the case, but the Justice Department recommended the Supreme Court reject the petition. The debate in Oklahoma speaks to tensions between state regulators and PBMs. In the absence of significant federal intervention, states have been increasingly attempting to regulate how drug middlemen operate. PBMs have pushed back, often arguing that federal law restricts local officials’ ability to determine companies’ business practices.

The pharmaceutical trade group applauded the court’s decision, while Mulready said he was disappointed.

“I guess if there’s a silver lining, looking over the past six years, there’s been a lot more movement to regulate PBMs in other states,” Mulready said.

The high court’s failure to get involved throws uncertainty into how states can regulate PBMs, said B. Douglas Hoey, CEO of the National Community Pharmacists Association, in a news release Monday.

“The big health insurance companies and their PBM lobby have been barnstorming the country, putting up one legal challenge after another,” Hoey said in the release. “Now the lower courts are divided, and the states are confused about what they can do to protect patients and small-business pharmacies from the unfair, anticompetitive practices of the PBMs, high drug costs and from PBMs overruling doctors’ prescribing decisions.”

Access this article at its original source.