The ERISA Industry Committee, Cigna, and the National Labor Alliance of Health Care Coalitions recently sued the state of Minnesota over its new PBM regulation law. In their suit, the plaintiffs allege that the state law violates the Employee Retirement Income Security Act (ERISA), which preempts state regulation of employee benefit plans. They also claim the law violates the U.S. Constitution.
The Minnesota PBM law prohibits PBMs from including only mail-order and specialty pharmacies affiliated with certain PBMs in their network. Another provision of the law prevents PBMs from adopting a pharmacy network requiring patients to get maintenance medications only from mail-order pharmacies.
The ERISA preemption debate is not a new one. For years, healthcare providers have claimed that ERISA preemption prevents states from protecting providers and patients. They argue that PBMs inflate prescription medication prices and put independent pharmacies out of business. In response, employers and benefit plan administrators say that state efforts to sidestep ERISA preemption and regulate PBMs will only increase healthcare costs.
The lawsuit comes amidst the state's efforts to enforce the Minnesota Pharmacy Benefit Manager Licensure and Regulation Act of 2019. The plaintiffs criticize the law as making it more difficult for employers to exclude pharmacies from their pharmacy networks, whether based on cost control or quality concerns.
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