(WASHINGTON, D.C.) – Yesterday, a federal court ruled in favor of McKee Foods, a privately held and family-owned employer based in Tennessee, finding that a 2023 law there regulating pharmacy benefit managers (PBMs) and their client health plans and sponsors is preempted by federal law. The ruling by the Sixth Circuit mirrors the Tenth Circuit’s recent ruling in the PCMA v. Mulready case, which held that the 1974 Employee Retirement Income Security Act (ERISA) does not allow states to regulate health plan and benefit design.

In response to the Sixth Circuit’s decision, David Marin, President and CEO of the Pharmaceutical Care Management Association, made the following statement.

“This is a huge win for patients, employers, and all those who want more affordable health coverage. Allowing each state to regulate plan design is a recipe for greater complexity and much higher health insurance costs for millions of American families. That’s why a prominent employer like McKee Foods fought this Tennessee law. Congress was clear more than 50 years ago that employers must be able to offer uniform benefits across state lines, rather than trying to comply with an untenable patchwork of 50 state regulations. And prescription drug benefits are no exception. ERISA is the bedrock of the employer health coverage system, and without it, the health and drug benefits that millions rely on would be in grave danger. We applaud this ruling that, once again, should discourage state legislatures from pursuing costly anti-payor, anti-patient laws that seek to intrusively regulate health plan designs.”