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Attorney General Josh Stein Urges Supreme Court to Approve State Regulation of Pharmacy Benefit Managers

For Immediate Release:
Thursday, June 13, 2024

Nazneen Ahmed (919) 716-0060

(RALEIGH) Attorney General Josh Stein filed a friend-of-the-court brief urging the U.S. Supreme Court to rule on states’ authority to regulate pharmacy benefit managers (PBMs). Attorney General Stein filed this brief with a bipartisan coalition of 32 Attorneys General to help protect consumers by assuring that all states can regulate PBMs.

“Too many prescription drugs are simply too expensive,” said Attorney General Stein. “I am urging the court to take this action to better protect North Carolinians from these high costs.”

The brief was submitted to support Oklahoma’s request that the Court review a decision from the U.S. Court of Appeals for the Tenth Circuit, which held that federal laws preempt Oklahoma laws that regulate pharmacy benefit managers (PBMs). Attorney General Stein and the coalition of Attorneys General argue that the case presents important questions of federal law that need resolution from the Court, noting that the Tenth Circuit’s decision conflicts with a prior U.S. Supreme Court decision and with decisions in similar cases from the Eighth Circuit.

Pharmacy benefit managers (or “PBMs”) act as go-betweens for insurance providers and pharmaceutical companies. They create and maintain lists (also known as “formularies”) of prescription medications that are available through a particular insurance plan. Because getting a drug placed on a formulary can be extremely profitable, drug companies are often willing to offer PBMs significant rebates in exchange for choosing their products. In theory, these rebates should ultimately be passed along to consumers as lower costs for medications. But PBMs have not been transparent about the rebates that they have received, and the cost of prescription medications has continued to increase nationwide.

In February, Attorney General Stein led a bipartisan coalition of 39 attorneys general calling on Congress to help lower drug costs for Americans by reforming how pharmacy benefit managers operate. You can learn more here.

Attorney General Stein is joined in filing the brief by the Attorneys General of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Virginia, and Washington.

A copy of the brief is available here.