BENEFIT MANAGERS’ DISCLOSURE BACKED:

A federal judge has sided with the state of Maine in an industry challenge to the constitutionality of a state law that requires pharmacy benefit managers to disclose side payments from drug companies and other financial information. U.S. Magistrate Judge Margaret Kravchuk’s recommended a decision found in the state’s favor on all issues raised in a 2003 lawsuit by the Pharmaceutical Care Management Association, a trade group representing benefit managers, or PBMs.

The law, which has been put on hold pending the outcome of the court case, was viewed by supporters as a means to promote transparency by giving health plan clients access to information about discounts, drug switching programs and any conflicts of interest involving benefit managers. The industry argued that the law was unconstitutional and could end up harming consumers because PBMs make use of confidential information to get drug companies to compete with each other by lowering their prices.

The lawsuit claimed that Maine’s Unfair Prescription Drug Practices Act is preempted by federal law, would constitute a regulatory taking of trade secrets and revenues, and violates due process.

Kravchuk’s recommendation now goes before a U.S. District judge. The recommendations of magistrate judges are in most cases accepted. Maine’s law was the first of its kind. The PCMA has obtained a preliminary injunction barring enforcement of a similar statute in the District of Columbia. States that rejected PBM disclosure laws last year include California, Florida, Iowa, Kansas Maryland, Minnesota, Mississippi, New York, Vermont and Washington, the association said.

Topics Maine