Oklahoma Drug Law Challenge Resumes After Virus Delays SCOTUS

The U.S. Supreme Court’s decision to postpone certain oral arguments in light of the Covid-19 health crisis has led a federal judge in Oklahoma to reignite a legal struggle over that state’s regulation of pharmacy benefit managers.

Judge Bernard M. Jones of the Western District of Oklahoma on Wednesday granted Oklahoma Insurance Commissioner Glen Mulready’s request to resume a lawsuit over the state’s PBM law. Jones paused the case in January so the Supreme Court could consider a similar challenge to an Arkansas law, but the arguments in that case—initially set for April 27—were postponed until next term in light of the ongoing health crisis.

In both lawsuits, the Pharmaceutical Care Management Association—a trade group representing the PBM industry—argues that state attempts to regulate the industry are preempted by the federal Employee Retirement Income Security Act.

The laws are aimed at preventing PBMs like Express Scripts, CVS/Caremark, and OptumRX from underpaying pharmacies for generic drugs. More than 40 states have passed similar laws, and the Supreme Court’s opinion in the Arkansas case could decide whether those laws remain on the books.

The PCMA has been fighting these state laws for several years. It persuaded the Eighth Circuit to strike down both the Arkansas law and a similar law in Iowa, and it’s currently challenging laws in North Dakota and Oklahoma.

The justices first postponed the Arkansas case on April 3. Five days later, Mulready asked Jones to resume the Oklahoma case, saying the parties “no longer have certainty” that the Supreme Court will rule by June, which risks an “indefinite abeyance” of the Oklahoma lawsuit. On April 13, the justices announced that the Arkansas case won’t be argued until at least October.

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, 4/22/20.