Lawsuit Challenges New Arkansas Mandate Requiring Employers and Consumers Pay Higher Rates to Drugstores

An Unprecedented 'Blank Check' to Drugstores is Challenged in Federal Court

News provided by

Pharmaceutical Care Management Association

Aug 14, 2015, 11:45 ET

WASHINGTON, Aug. 14, 2015 /PRNewswire-USNewswire/ -- The Pharmaceutical Care Management Association (PCMA), the national association representing America's pharmacy benefit managers (PBMs), has filed a lawsuit in Arkansas challenging a new law requiring employers to pay higher rates to drugstores for prescription drugs. Arkansas is the only state with such a law that is a "blank check" to drugstores.

PBMs administer prescription drug plans for more than 246 million Americans who have health coverage through commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), state government employee plans, Medicaid plans, and others.

"At a time when people are concerned about rising health costs, this new law forces employers and consumers to pay drugstores higher rates for prescription drugs," said PCMA President and CEO Mark Merritt.

The law—Arkansas 900—mandates that employers reimburse drugstores higher rates for prescription drugs, removing incentives for drugstores to dispense lower-priced options.

Specifically, Arkansas 900 will:

Force employers and consumers to pay drugstores more for prescription drugs.
Require employers and consumers to pay each pharmacy at or above its cost to acquire drugs, even when the same drugs are available at lower costs in the marketplace.
Entitle drugstores to appeal contract payments if they claim each individual past reimbursement was not large enough.
Incentivize drugstores to charge higher prices for generic drugs.
Empower drugstores to deny patients their medications if the drugstore determines it is not being paid enough.

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SOURCE Pharmaceutical Care Management Association