On April 20, 2023, McDermott's Alden Bianchi was a speaker at the ERISA Industry Committee's 2023 Annual Spring Policy Conference, which was held at the National Press Club in Washington, D.C. The panel in which he participated was entitled "From Clinic to Courtroom - Legislation and Litigation Limiting Prescription Practices," and it covered three main topics: state regulation of telehealth; the regulation of specialty pharmacy supply chains and delivery measures ("brown bagging," "white bagging" and "clear bagging"); and state-level efforts to regulate pharmacy benefit managers (PBMs) following the US Supreme Court's 2020 Rutledge decision, which held that an Arkansas law regulating the costs of prescription drugs was not preempted by the Employee Retirement Income Security Act of 1974 (ERISA).
Here are some of the program's key takeaways and predictions:
- While telehealth is here to stay, the high cost of Medicare reimbursements presents an immediate barrier to widespread adoption, and the particulars of how telehealth will be regulated will be left largely to the states.
- The battle over the delivery of specialty prescription drugs is heating up as PBMs seek to capture some of the margins previously available only to providers. State laws regulating pharmacies and pharmacists will be at the center of the battle, and future legislative efforts will likely be subject to challenge.
- State legislatures have read the Rutledge decision broadly in ways that virtually guarantee a good deal of future litigation. It might take as long as a decade, and it may well take more than one trip to the Supreme Court before plans, issuers, providers, state legislators and regulators, and other stakeholders have a reliable understanding of the contours of ERISA preemption in the pharmacy context.
Accompanying this post are copies of Mr. Bianchi's panel materials, including:
- Pharmaceutical Procurement 2023: Brown Bagging, White Bagging and Clear Bagging
- ERISA Preemption of State Pharmacy Laws in Retrospect: Where We Are, How We Got Here, and Where We Are Going
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