Federal Court Rejects Burdensome Fiduciary-Disclosure Requirement

(Washington, DC)-Late yesterday, the U.S. District Court in D.C. struck down Title II of the D.C. Access Rx Act, which would have imposed burdensome fiduciary-disclosure requirements on pharmacy benefit managers (PBMs) and increased prescription drug costs for consumers and payers, the Pharmaceutical Care Management Association (PCMA) said today.

“This fiduciary-disclosure requirement would have been a recipe for higher drug prices and is exactly what consumers don’t need during these tough economic times,” said PCMA President and CEO Mark Merritt. “The ruling is a clear victory for consumer and payers.”

Since 2004, when PCMA filed this lawsuit, more than 30 states have considered and ultimately rejected similar legislation because it would lead to increased costs without any benefit for consumers.  For these reasons, a broad coalition of consumers, Fortune 500 employers, labor unions, health insurers, and others have worked together to defeat these proposals at the state level.  Maine is the only state that imposes similar fiduciary-disclosure requirements on PBMs.

The savings PBMs provide have been recognized by numerous government and independent analyses.  In recent years, the Federal Trade Commission (FTC), Government Accountability Office (GAO), Congressional Budget Office (CBO), and the Centers for Medicare & Medicaid Services (CMS) have all confirmed that PBMs’ generate substantial savings for public and private payers. 

In reaching its conclusion to nullify Title II, the Court only needed to find that federal law   under ERISA preempted the District’s requirements and did not need to address the other arguments raised by PCMA in its court filings.