A federal judge yesterday cleared the way for the District of Columbia to proceed with a 2004 law that would regulate PBMs. In a 20-page ruling, U.S. District Court Judge Ricardo Urbina vacated a preliminary injunction that had been granted to a PBM trade group, and he granted summary judgment.

This is only the second time a local jurisdiction has been told by a federal court that it can require PBMs to: act as fiduciaries on behalf of health plan members and company employees; disclose the quantity and cost of drugs purchased, as well as drug switching; and disclose any financial arrangements with drugmakers in order to prevent conflicts of interest and pass along savings. A similar law is in effect in Maine, which had also been challenged.

PBMs have been fighting such laws around the country and succeeded, in part, by pointing to the DC law as being stuck in gear and unlikely to take effect. Now, though, more state legislatures may be emboldened to push similar bills, says Sharon Treat, a Maine lawmaker who heads the National Legislative Association on Prescription Drug Pricing.

“This is a victory for consumers and states,” says Treat. “The decision says this kind of law is just fine. And we now have two different federal circuit courts saying a state, or in this case, a city, may regulate PBMs. The way is clear now for other legislatures to do the same thing and reduce health care costs.”

The Pharmaceutical Care Management Association, the PBM trade group, which filed the lawsuit against the District of Columbia, issued a statement saying it will appeal the ruling.
[tags]PBM[/tags]