Miyares joins cohort pressing for U.S. Supreme Court to review pharmacy benefit manager case

Behind the counter of Walnut Hill Pharmacy, an independent business located in Petersburg. (Meghan McIntyre/Virginia Mercury)

Virginia Attorney General Jason Miyares wants states to have more authority to regulate pharmacy benefit managers. 

Pharmacy benefits managers, or PBMs, are the middlemen that negotiate contracts between health plans, drug manufacturers and pharmacies. Though they do retain rebates and discounts set in their contracts, the exact amount of savings passed onto consumers has been relatively unknown. In recent years, several states have pushed legislation to enhance transparency, but it’s unclear how much power states have to enact their own regulations due to different court rulings on similar cases. 

So, Miyares recently signed onto a 32-state amicus brief to request that the United States Supreme Court review a case from Oklahoma. In that case, the U.S Court of Appeals for the Tenth Circuit upheld that federal laws preempt Oklahoma’s laws to regulate PBMs. In the brief Miyares joined, the coalition argued that the Tenth Circuit decision conflicts with previous, related decisions by the Supreme Court and from the Eighth Circuit. 

“Their self-serving protections stifle competition, obscure transparency, and restrict access to potentially life-saving medications,” Miyares said of PBMs in a statement. “PBMs have not served the best interests of consumers, and it is essential the Court affirms that all States can regulate [them].”

But a representative of a PBM trade association asserts the Tenth Circuit got it “right.” 

“We will continue to defend that position,” Greg Lopes, vice president of government affairs for the Pharmaceutical Care Management Association, said in an email. 

Earlier this year, Virginia lawmakers attempted to establish a single PBM for Medicaid but the measure failed. 

Amendments establishing single Va. Medicaid pharmacy benefits manager die in conference

Sometimes, pharmacies are reimbursed for less than what they pay for medications due to the lack of transparency from PBMs and manufacturers. When advocating for Virginia to have a single PBM for Medicaid, Sen. Travis Hackworth, R-Tazewell, explained that independent pharmacies like the one he used to own are often impacted the most. 

“There are more Medicaid payers than there are private payers, and so when the PBMs get in there … it’s the only business I’ve ever had that literally we would have customers walk in and I’d lose $5 on you, maybe $5 on this one and make $20 here and I lose $20 here; it’s crazy,” he said. “It was all the same dosages and medications.”

If the U.S. Supreme Court were to review Oklahoma’s case, it could set a precedent for other states to have more regulatory powers over PBMs. Miyares joining the amicus brief is the latest in Virginia’s attempts to rein in drug costs. 

For the past several years in a row a bipartisan coalition of lawmakers has tried to create a Prescription Drug Affordability Board. After clearing the legislature this year, it was vetoed by Gov. Glenn Youngkin. Skeptics of the proposal have argued there’s not enough evidence it would function as intended — boards in states that have created them have been set up in recent years. 

In his veto statement, Youngkin called the idea “noble in its intent,” but expressed concern that the board could have potential to limit availability of some drugs. 

If created, it would have the authority to review sudden price increases on prescription medicine and set a limit on what pharmaceutical manufacturers can charge people for them. Lawmakers supportive of the proposal relayed how constituents have struggled to pay for medications or have had to weigh the costs against other necessities like paying rent or keeping groceries in their households. 

Sen. Creigh Deeds, D-Charlottesville, who’d carried the bill this year in the Senate, said he’s going to explore when to bring the bill back up again and if any changes might make it more palatable to Youngkin should the bill come up next year while he is still governor.  

“I’ve got to sit down with the advocates and see what they want to do and talk with [Youngkin] about what changes would make him favor this bill if there are changes that could be made,” Deeds said.

One such advocate has been the AARP of Virginia. They supported Deeds’ bill. Though Youngkin vetoed that proposal, AARP associate director Jared Calfee said his organization was pleased that the governor signed bills to impose fees on unlicensed PBMs and enhance reporting requirements. 

“While PBMs have a role to play with costs of prescription drugs, we view manufacturers and some of their practices as a main driver of costs,” Calfee said. 

It’s why creating the affordability board is still a top priority for his organization.

While best practices to enhance prescription drug affordability are debated in courts and legislatures, Congress has already worked on a bit of relief with the passage of the Inflation Reduction Act in 2022. That means that 10 drugs are being negotiated with the Centers for Medicare and Medicaid Services; and the results of those negotiations are slated to take effect in 2026. 

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