Court Upholds Most Sections of North Dakota PBM Law

Earlier this week, the 8th Circuit Court issued a ruling indicating that a North Dakota law Regulating PBMs, passed in 2017, does apply to and does regulate ERISA (employer sponsored) health plans. The ruling also indicates that much of the North Dakota law also applies to Part D plans. The ruling is still being digested, but we hope to provide more details soon. Unfortunately, the one detail we do have is that the ruling does not support the prohibition of DIR fees in Part D. The judgment can be found at: Opinion PCMA v. Wehbi

Immediately after its passage, the North Dakota law was appealed by the Pharmaceutical Care Management Association (PCMA) and traveled up to the 8th Circuit Court, where the PCMA appeal was upheld. However, after the U.S. Supreme Court (SCOTUS) judgment a year ago, which ruled that an Arkansas PBM law was not preempted by ERISA laws, SCOTUS directed the 8th Circuit Court to revisit the North Dakota law. This week's judgment was a result of the Court revisiting that law. This ruling would appear to have a very significant impact on the applicability of Minnesota's PBM regulations on ERISA and even Part D plans.

In addition to the positive regional news, the Minnesota Administrative Law Judge (ALJ) issued her report on the final proposed Minnesota Commerce MN-62W Rules earlier this week. It basically agreed with the Department's earlier response to the feedback the Minnesota Pharmacy Alliance and MPhA gave during the public hearing, comment and rebuttal periods. Jeff Lindoo also reviewed the ALJ Report and said: "As I read through it, the ALJ pretty much agreed with Commerce's proposals, as amended by Commerce, meaning many wins for pharmacy. The only real losses I see are: no further definition of good faith and fair dealing; no patient access standard at all for networks; no ruling on ERISA preemption, which we asked for but never really expected to get."

Related: American Pharmacists Association statement on the Eighth Circuit Court decision (published Nov. 17)