Consolidation and Competition A Doctrine in Name Only — Strengthening Prohibitions against the Corporate Practice of Medicine (NEJM) Jane M. Zhu, Hayden Rooke-Ley, and Erin Fuse Brown The NEJM perspective examines state corporate practice of medicine laws that prevent ownership or control of physician practices by corporate entities. In an accompanying audio interview, Erin Fuse Brown discusses the role of these laws, including the usefulness and how they could be strengthened. Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update (American Medical Association) José R. […]

On December 10, 2020, the Supreme Court overturned a decision by the Eighth Circuit and upheld an Arkansas Law to regulate pharmacy benefit managers (PBMs).  In a unanimous decision (8-0, Justice Barrett did not participate in the case), the court reaffirmed that state regulation of prices is not preempted by the Employee Retirement Income Security Act of 1974 (ERISA). The ruling in this case found that Arkansas’ law was a price regulation.  In effect, the law required PBMs to reimburse pharmacies at a rate above the price the pharmacy paid […]

On October 6, the Supreme Court will hear oral arguments in the case Rutledge v. Pharmaceutical Care Management Association (PCMA). A decision in this case will resolve whether an Arkansas law to regulate pharmacy benefit managers (PBMs), Act 900, is preempted by federal law and  may affect the enforceability of similar laws passed by at least thirty-five other states.[1] Arkansas passed Act 900 to protect pharmacies from dispensing drugs at a loss. Specifically, the law requires PBMs, when challenged by a pharmacy, to raise the reimbursement rate for a drug […]

Senior Health Policy Researcher Katie Gudiksen was quoted in the 4/1/2020 Pharmacy Today article The skinny on the PBM case before the U.S. Supreme Court: “Many people incorrectly equate the term ‘ERISA plan’ with ‘self-funded plans,’” said Katherine L. Gudiksen, PhD, MS, who is senior health policy researcher for The Source on Healthcare Price and Competition, a program associated with the University of California Hastings College of the Law. “Congress saved any state insurance law from ERISA preemption, so states [are able to] continue to regulate insurance—including health insurance—in the state,” […]

The Source has been closely following legal challenges to state legislation that seek to promote competition and contain costs in healthcare services. In this month’s Litigation and Enforcement Highlights, we roundup the latest developments in some of the pending cases as well as new lawsuits that have been filed to derail state efforts to address rising prescription drug costs.   Arkansas: Supreme Court Grants Review of PBM Law In November 2019, the Source Blog covered the long litigious history of lawsuits filed against various pharmacy benefit manager (PBM) laws from […]

As states step up their efforts to control prescription drug prices, many state legislatures have targeted pharmacy benefit managers (PBMs) and their role in rising prices by introducing legislation to bring greater transparency to the inner workings of PBMs. As a result of these efforts, however, states increasingly face challenges from the pharmaceutical industry, specifically the Pharmaceutical Care Management Association (PCMA), a trade association representing PBMs. Over the years, PCMA has brought a number of lawsuits challenging state legislation regulating PBMs, claiming that the Employee Retirement Income Security Act (ERISA) […]

Early this month, the Trump administration withdrew the proposed Drug Rebate “Safe Harbor” Rule. Under the proposed rule, rebates currently paid by pharmaceutical companies to pharmacy benefit managers (PBMs) and payers would instead be passed directly to consumers.  The Congressional Budget Office (CBO) estimated that the rule would cost the federal government $177 billion over 10 years. According to news sources, the administration decided to withdraw the rule due to concerns over cost, as well as potential windfall profits to the pharmaceutical industry. This outcome is unfortunate, as the current […]

The Lower Health Care Costs Act, released in May 2019 by Senators Lamar Alexander and Patty Murray, addresses many inefficiencies in healthcare markets and has the potential to both increase competition and lower costs for healthcare services. The 195-page draft federal bill, also known as the Alexander-Murray Bill (S 1895), contains more than three dozen provisions designed to address health care costs. The bill is divided into five titles: 1) Ending Surprise Medical Bills, 2) Reducing the Prices of Prescription Drugs, 3) Improving Transparency in Health Care, 4) Improving Public […]

As public outcry against healthcare costs, in particular prescription drug prices, continues to dominate the national spotlight, the Federal Trade Commission (FTC) is stepping up its efforts to regulate anticompetitive conduct in various markets of the healthcare supply chain. In this month’s Litigation and Enforcement Highlights, we take a look at FTC enforcement actions that target 1) the e-prescription market, 2) reverse-payment agreements between drug manufacturers, and 3) pharmacy benefit managers.   FTC Targets Monopoly in Electronic Prescription Market in Antitrust Action Against Surescripts As the country faces building pressure […]

State enforcement is the theme of the month in healthcare antitrust. A panel of antitrust experts at a recent Antitrust Symposium hosted by UC Hastings College of the Law discussed how exclusionary contracts and anticompetitive conduct by players in both the provider and pharmaceutical markets hinder competition and drive up healthcare prices. This edition of Litigation and Enforcement Highlights takes a look at current anticompetitive practices of providers and PBMs and the ensuing state regulatory efforts to address them.   A Tale of Two Coasts in Provider Market Enforcement As […]