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AG Derek Schmidt: U.S. Supreme Court confirms state authority to regulate pharmacy benefit managers

Release Date: Dec 10, 2020

TOPEKA – (December 10, 2020) – The U.S. Supreme Court today affirmed state authority to regulate companies that serve as third-party administrators of major public and private health plans, commonly called pharmacy benefit managers (PBMs), Attorney General Derek Schmidt said.

“We have been taking a hard look at the behavior of PBMs in the marketplace,” Schmidt said. “Today’s U.S. Supreme Court decision, which we sought, confirms that states have legal authority to protect consumers, taxpayers and small businesses by regulating these middlemen.”

The case arose in Arkansas, which passed a state statute regulating PBMs. Regulated companies challenged the state’s authority, arguing that federal law preempted state action. Kansas filed a brief backing Arkansas in arguing that states are not preempted, and today the U.S. Supreme Court agreed with the states.

Today’s unanimous decision clears the way for further state oversight of the behavior of PBMs in the prescription-drug marketplace. A copy of the decision can be found at https://bit.ly/37RJ2wL.

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