Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Benefits newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (April 22, 2020, 4:46 PM EDT ) A federal judge cleared the way Wednesday for Oklahoma to start enforcing a law regulating pharmacy benefit managers during the coronavirus outbreak when he ruled that a trade group's ERISA-based challenge to the statute could resume.
U.S. District Judge Bernard M. Jones granted the Oklahoma Insurance Department's motion to lift a stay in the Pharmaceutical Care Management Association's suit alleging that H.B. 2632, the Patient's Right to Pharmacy Choice Act, was preempted by the Employee Retirement Income Security Act and Medicare Part D.
The agency had agreed not to enforce the law before the resolution of the case in a November stipulation, and the PCMA in return said that it wouldn't seek a preliminary injunction against the law.
In January, the parties further agreed to pause the legal proceedings while the U.S. Supreme Court mulled Rutledge v. PCMA, a case involving an ERISA preemption challenge to an Arkansas law regulating PBMs that was struck down by the Eighth Circuit.
But in April, the agency asked the court to lift the stay and announced its intention to withdraw from the stipulation, arguing that the COVID-19 pandemic changed the situation.
While the Supreme Court was originally anticipated to wrap up Rutledge by June, the high court's schedule was disrupted by the outbreak and there was a risk of "an indefinite abeyance," the agency said.
Additionally, the pandemic impacted the need to enforce the Patient's Right to Pharmacy Choice Act, according to the agency, which said the state had already received preliminary reports of certain PBMs abusing their market power.
The agency said that it would wait at least 21 days before enforcing the law once the stay was lifted unless the PCMA moved for a preliminary injunction, in which case the agency would wait until the court ruled on that request before starting enforcement.
Although the PCMA didn't object to the agency's motion to lift the stay, the organization said in its response that it "believes it is still an inefficient use of party and judicial resources to proceed with this litigation prior to a decision in Rutledge."
The PCMA also said that the Oklahoma Insurance Department and related defendants made "a series of unnecessary and inflammatory allegations in their motion about pharmacy benefit managers" and that the organization was "compelled to respond."
According to the organization, PBMs have been working hard to make sure that health plan members still have access to prescription drugs, adopting flexible policies and letting beneficiaries go to out-of-network pharmacies in certain situations.
PBMs also help health plan sponsors and their beneficiaries save costs and improve access to prescription drugs for workers, seniors and others, the organization said.
Counsel and representatives for the parties did not respond Wednesday to requests for comment.
The PCMA is represented by Joe E. Edwards of Crowe & Dunlevy and Dean Richlin, Kristyn DeFilipp, Andrew London and Stephen Stich of Foley Hoag LLP.
The Oklahoma Insurance Department is represented by Randall J. Yates and Zach West of the Oklahoma Attorney General's Office.
The case is Pharmaceutical Care Management Association v. Mulready et al., case number 5:19-cv-00977, in the U.S. District Court for the Western District of Oklahoma.
--Editing by Abbie Sarfo.
For a reprint of this article, please contact reprints@law360.com.
