U.S. Supreme Court Rules for State Regulation

The U.S. Supreme Court has affirmed that states have the authority to regulate companies that serve as third-party administrators of major public and private health plans, commonly called pharmacy benefit managers, or PBM’s.

Attorney General Derek Schmidt said, the “U.S. Supreme Court decision, which we sought, confirms that states have legal authority to protect consumers, taxpayers, and small businesses by regulating these middlemen.”

The case arose in Arkansas, which passed a state statute regulating PBM’s.

Regulated companies then challenged the state’s authority, arguing that federal law preempted state action.

Kansas filed a brief backing Arkansas in arguing that states are not preempted, and the U.S. Supreme Court has now agreed with the states.

The Supreme Court’s unanimous decision clears the way for further state oversight of the behavior of PBM’s in the prescription-drug marketplace.