October 6, 2020 at 5:00 am ET
Managed care pharmacy professionals work to get patients the medications they need at costs they can afford. They employ evidence-based practices to promote optimal medication use and enhance population health outcomes. These tools and systems protect patients and provide critical access to care. Patients are at risk of increased health care costs and hindered health outcomes depending on the ruling in Rutledge v. The Pharmaceutical Care Management Association, set to be argued today before the U.S. Supreme Court.
On the docket today is access to affordable medications. A ruling in favor of Rutledge would further fracture our health care system, making it challenging if not impossible for managed care professionals to efficiently apply proven tools and practices, such as formulary management, that provide millions of patients the best possible benefits for their prescribed medications at the lowest possible costs.
The Rutledge case threatens the ability of pharmaceutical benefits to continue for millions of Americans. The case centers on a 2015 Arkansas law that restricts how pharmacy benefit managers may contract with pharmacies under health plans governed by the Employee Retirement Income Security Act. Should the Supreme Court rule in favor of Rutledge and find that states are free to impose their own requirements on pharmacy benefit plans — and that ERISA does not pre-empt such laws in favor of a uniform federal standard — the result will be fragmented health plans, resulting in higher premiums on medications for millions of Americans across the country.
ERISA, adopted in 1974, establishes standards of conduct for plan sponsors and employers. Its pre-emptive scope serves to promote uniformity and enable benefit plans to maximize value for plan beneficiaries without having to negotiate disparate local requirements. A ruling in favor of Rutledge could introduce varying – and perhaps contradictory – state laws. This would be unworkable for multistate employers and the plans that administer their health care benefits. Under Rutledge, employees who work for multistate companies will pay disparate amounts for their medications depending on where they live, ultimately driving up health care costs and limiting access to care. A ruling in favor of Rutledge essentially would mean that an employee in Maryland Could conceivably receive better access to care than a colleague who lives in Virginia.
A ruling limiting ERISA’s pre-emptive scope would be a hinderance to the tools and systems in place designed to protect patients. If the court approves of the Arkansas-specific requirement here, individual state regulations could preclude ERISA-governed pharmacy benefit plans from implementing, for example, prior authorization and other medication-use management strategies in their plan design. This ruling would also make an already complex health care system even more so – creating additional financial burdens that would be passed directly to consumers, and that will undermine development and deployment of the systems and tools put in place.
Rutledge is in front of the Supreme Court at a time when drug prices are already spiking. The average American spends $1,200 a year on prescription drugs. And according to HealthAffairs, which looked at the prices of oral and injectable brand-name drugs, costs increased annually from 2008-2016 by 9.2 percent and 15.1 percent, respectively. For specialty drugs, costs increased 20.6 percent and 12.5 percent, and generics increased 4.4 and 7.3 percent respectively. A decision to reverse the lower court’s ruling would exacerbate this issue, further restricting access to care for millions of Americans.
In addition to high drug prices, we are currently in the middle of a historic public health crisis, which not only has unprecedented health impacts, but financial and economic impact as well. Job loss linked to the pandemic is historically high, with millions of Americans having lost jobs since March. Access to affordable health care including a pharmacy benefit is of critical importance as more and more are impacted by this pandemic.
Susan A. Cantrell is the chief executive officer of the Academy of Managed Care Pharmacy.
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