Group representing pharmacy benefit managers files suit to block ND laws

pharmacy benefit managers, PBMs, ND pharmacy lawsuit

The Pharmaceutical Care Management Association (PCMA), representing pharmacy benefit managers (PBMs), is challenging two new laws recently passed in North Dakota. The suit alleges that the laws would “threaten patient safety” and “increase prescription drug costs for the state’s employees, consumers and Medicare enrollees,” according to PCMA’s press release.

The suit was filed Tuesday, July 11 in U.S. District Court and challenges SB 2301 and SB 2258, going so far as to call the bills “onerous.” The suit named three defendants, including State Health Officer Mylynn Tufte, the North Dakota Board of Pharmacy, and Attorney General Wayne Stenehjem.

The ND Senate passed the two bills unanimously in the last session and the House of Representatives passed the two bills with an overwhelming majority. Gov. Doug Burgum signed both bills in April, and the bills are set to go into effect August 1.

The PCMA is asking for a temporary injunction to keep the bills from going into effect until the lawsuit is settled.

According to Pharmacy ND, PBMs are third-party administrators, or “middlemen,” that negotiate drug prices with manufacturers and handle the exchange of money between pharmacies and health plan enrollees. PBMs claim to help lower drug prices, but are often accused of hiding the prices of prescription drugs and charge large markup for the same medicines. PBMs are notorious for their lack of transparency.

SB 2301 and SB 2258 increase price transparency and establish some boundaries between administrative functions and mail-order pharmacies, Sen. Nicole Poolman told the West Fargo Pioneer.

“We recognize the important role PBMs can play in saving money for the insurance companies, but the bill before you ensures they don’t do it at the expense of the consumer or your local pharmacist,” she said.

Mike Schwab, Executive Vice President of the ND Pharmacists Association, said that the lawsuit doesn’t come as a complete surprise because any time you try to rein in the abusive practices of PBMs (aka prescription insurance companies), they cry foul and don’t want to be transparent in their business activities. These bills increase patient access to services, increase patient safety, increase patient choice and require PBMs to be more transparent in how they conduct business in the state of North Dakota.

Schwab said that recently the states of Iowa and Arkansas also passed PBM transparency laws and PCMA filed lawsuits against those states as well.

Be sure to check back for updates on this impending lawsuit. To have headlines delivered right to your inbox, be sure to sign up for the Pharmacy ND Newsletter.