Rutledge v. Pharmaceutical Care Management Assn. (18-540)

argument 18-540

Rutledge v. Pharmaceutical Care Management Assn.

Supreme Court of the United States 1h 11m 8 speakers 8 chapters transcribed 6 days ago official recording ↗

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What is the central legal issue in Rutledge v. Pharmaceutical Care Management Association?

John G. Roberts 0:00

We'll hear argument first this morning in case eighteen five forty, Rutledge versus Pharmaceutical Care Management Association. General Bronny?

Unknown 0:11

Thank you, Mr Chief Justice, and may it please the court. Pharmacy benefit managers are drug middlemen that reimburse pharmacists for the cost of prescription drugs. Those reimbursements are frequently below a pharmacy's cost. That drives pharmacists out of business and it has left many communities without a pharmacist. AG nine hundred responded to that practice by regulating what PBMs pay pharmacists. That response isn't preempted for three reasons. It doesn't regulate benefits. It doesn't regulate plan administration and it doesn't regulate or discriminate against the RISA entities. First, Act nine hundred does not regulate benefits. Instead, it regulates the price of drugs that a plan has already decided to cover.

Unknown 0:55

That's rate regulation, and under travelers, that's not preemptive. And that's because cost differences don't force plans to behave differently in different states. And thus don't interfere with uniform administration. Second, Orissa doesn't preempt laws that implement or enforce rate regulations. Indeed, absent enforcement, there's no regulation. And respondent doesn't dispute that Act nine hundred's enforcement mechanisms implement Arkansas's rate regulation. Nor for that matter do those mechanisms regulate plant administration. Rather, they regulate PPM reimbursement practices. And plans don't control those practices. Instead, those practices are governed by PPM pharmacy contracts that aren't even shared with plants.

Unknown 1:39

And it therefore defies common sense to suggest that Act nine hundred regulates plan administration. There is no connection with problems. Third, Act nine hundred does not refer to ERISA. Under Dillingham, only laws that treat ERISA plans differently contain a prohibited reference and are preempted. Respondent doesn't even attempt to argue that's true here. Nor could it since Act nine hundred applies to PPMs that work for both ERISA and non ERISA entities. This court should reverse the judgment below.

John G. Roberts 2:10

Uh counsel, uh your basic point it seems to me is that uh the law regulates uh drug prices. That's certainly the the purpose of it. But it doesn't say anything about drug prices. Instead, uh it talks about uh what plans have to pay uh for benefits, the methodology of determining the amount to be paid, uh the timing and procedures for updating payment schedules, uh the dispute resolution processes, uh remedies. Uh it has things like uh the authorizing the declining to dispense I I mean at the end of the day all this might have an impact on drug prices, but uh it seems to me that it's very different uh and those differences really do go to what Arissa is uh trying to regulate.

Unknown 2:59

Well, Your Honor, I w I think at the end of the day the one thing that affects plans and in fact the only way in which

Daniel P. Waxman 3:05

that

Unknown 3:05

our law actually affects plans is it might alter the what plans ultimately pay. Our law does not apply directly to plans. Our law is directed at PBMs. Um and and what P VMs pay um pharmacies. So in in that sense, the only effect on a plan or the only effect that a plan might see might be the possibility that at the end of the day it might pay a little bit more. But that's the same thing that was true in travelers. In travelers, when New York regulated what commercial insurers were paying hospitals with the surcharges, this court acknowledged that that the odds were that those surcharges would be passed on to the plans and that might affect how the the the benefits packages that the plans might choose to offer.

Unknown 3:45

It might influence their choice of administrator. But what the the court emphasized is at the end of the day that that's just cost and it might influence shopping decisions. But ultimately what's important is it's not dictating substantive plan decision making. And the same thing is true here. We haven't dictated how plans resolve anything. We haven't dictated plan decision making about what to provide or how to provide it or anything like that.