(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA) applauds the recent ruling by the U.S. Court of Appeals for the Tenth Circuit in PCMA v. Mulready. In a unanimous decision, the court sustained PCMA’s challenge to four provisions of a misguided Oklahoma state law by finding them to be preempted under the Employee Retirement Income Security Act of 1974 (ERISA) and the Medicare Part D program.
The court’s decision supports the interests of employers, as well as unions and Part D plans, who seek to follow a common set of legal requirements for the benefits they provide to millions of Americans—a clear defeat of proposals that would result in a cumbersome, inefficient, and costly patchwork of potentially conflicting state-by-state benefit requirements.
“The Mulready decision protects employer-sponsored health coverage by promoting employers’ choice and flexibility over benefit design. It is clear that ERISA and Medicare Part D are the law of the land for benefits organized under these federal programs,” said Jack Linehan, General Counsel, PCMA. “Importantly, the ruling confirms the breadth of ERISA preemption, which has been the linchpin for employer- and union-sponsored benefits in America. It has allowed multi-state businesses to offer affordable, uniform, and equitable health coverage – including for prescription drugs – for their beneficiaries, regardless of where they live.”
The Oklahoma law would have specifically restricted pharmacy benefit companies and health plans from designing quality-enhancing and cost-reducing pharmacy networks that advance plan affordability and choice. By finding these provisions to be preempted, the Tenth Circuit preserves the ability of U.S. employers, unions, and Part D plan sponsors to design and administer health benefits in the way that best meets the needs of employees, seniors, and their families.
Additionally, the decision cautions against illegal state interference with the federal Medicare program, which can boost costs and restrict choices for Part D plans and American seniors. The decision helps to preserve cost-efficient prescription drug benefit design for Part D plans while shielding Medicare program finances.
PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients.