Virus, SCOTUS Delays Spur New Front in Oklahoma Drug Law Battle

The ongoing coronavirus health crisis and the U.S. Supreme Court’s recent decision to postpone oral arguments prompted a federal judge in the Western District of Oklahoma to consider whether the state can resume enforcing its law regulating pharmacy benefit managers.

Judge Bernard M. Jones on Wednesday ordered the Pharmaceutical Care Management Association—a trade group representing the PBM industry—to respond to Oklahoma Insurance Commissioner Glen Mulready’s request to resume a lawsuit over the state’s PBM law.

The order comes one day after Mulready sought permission to resume enforcing the law and restart litigation with the PCMA, which in 2019 filed a lawsuit claiming the law was preempted by the federal Employee Retirement Income Security Act. Jones put the case on hold in January to allow time for the Supreme Court to issue its decision in a similar lawsuit targeting an Arkansas law. The justices recently postponed arguments in that case—initially set for April 27—in light of the coronavirus crisis.

Mulready says these changed circumstances mean both the legal fight and enforcement of the Oklahoma law should resume.

The parties “no longer have certainty” that the Supreme Court will resolve the Arkansas case by June, which risks an “indefinite abeyance” of the Oklahoma lawsuit, Mulready said. And the need to enforce the law is heightened in light of the coronavirus outbreak, which has “plunged the world into a state of medical and economic emergency” that’s particularly harmful to the older and rural people that the law seeks to protect, Mulready said.

More than 40 states, including Oklahoma and Arkansas, have passed laws aimed at preventing PBMs like Express Scripts, CVS/Caremark, and OptumRX from underpaying pharmacies for generic drugs. The PCMA has challenged several laws in court, arguing that they’re preempted by ERISA. In January, the Supreme Court said it would consider the PCMA’s lawsuit against Arkansas Attorney General Leslie Rutledge.

The PCMA is represented by Crowe & Dunlevy and Foley Hoag LLP. Mulready is represented by the office of the Oklahoma Attorney General.

The case is Pharm. Care Mgmt. Ass’n v. Mulready, W.D. Okla., No. 5:19-cv-00977, order on briefing 4/8/20.