The Oklahoma law was intended to increase access to pharmacies for patients and strengthen the bargaining power of independent pharmacies across the state.
On October 7, 2024, the Supreme Court of the United States asked the U.S. solicitor general to file a brief in the case Mulready v. Pharmaceutical Care Management Association, where the state of Oklahoma appealed a Tenth Circuit decision invalidating a law regulating pharmacy benefit managers (PBMs). In an environment where less than 5 percent of appeals are granted certiorari, the invitation by the Supreme Court for the federal government to file a brief signals that the Court is seriously contemplating hearing this case in the upcoming term.
Oklahoma’s appeal stems from an August 2023 decision in which the Tenth Circuit found that four specific provisions of a state law regulating PBMs—the Oklahoma Patient’s Right to Pharmacy Choice Act—were preempted by ERISA and Medicare:
- The “access provision,” providing minimum standards for PBM networks to ensure that patients have an in-network and preferred pharmacy nearby.
- The “discount provision,” preventing PBMs from using discounts to encourage the use of pharmacies affiliated with the PBM over independent pharmacies.
- The “any willing provider provision,” requiring PBMs to accept any pharmacy that meets the PBM’s terms and conditions into the network.
- The “probation provision,” prohibiting PBMs from terminating a licensed pharmacy based on the pharmacy being on probation.
The Oklahoma law was intended to increase access to pharmacies for patients and strengthen the bargaining power of independent pharmacies across the state.
State-level “any willing provider” laws are passed by state legislatures to prevent PBMs from excluding independent pharmacies from PBM networks. Under these laws, PBMs are required to provide independent pharmacies access to their networks so long as the pharmacies can satisfy standard and reasonable terms and conditions.
Without such laws obligating PBMs to afford independent pharmacies an opportunity to participate in these networks, certain PBMs exclude pharmacies from participating in them. Such exclusionary tactics render it impossible for independent pharmacies to either stay in business or otherwise compete with pharmacies affiliated with PBMs.
Should the Supreme Court grant certiorari and allow the appeal of the Tenth Circuit’s holding, a decision as to the legal enforceability of the Oklahoma law will be critical to pharmacies located in that state and likely could impact the continuing viability of any willing provider laws in other states.
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