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Law360 (April 8, 2020, 5:38 PM EDT) -- The Oklahoma Insurance Department has told a federal judge that it plans to withdraw from an agreement that tabled the enforcement of a state law regulating pharmacy benefit managers during a legal challenge, saying the coronavirus pandemic changed the situation.
The agency in its motion Tuesday asked the court to lift the stay in the Pharmaceutical Care Management Association's suit claiming that H.B. 2632, the Patient's Right to Pharmacy Choice Act, was preempted by the Employee Retirement Income Security Act and Medicare Part D.
If the stay is lifted, the state Insurance Department will wait at least 21 days before enforcing the law, unless the PCMA moves for a preliminary injunction, in which case the agency will wait until the court rules on that request before starting enforcement, the motion said.
"While PBM practices today do not necessarily pose an immediate threat to public health, the fast-developing COVID-19 emergency has convinced the state it needs all the regulatory tools at its disposal to protect Oklahomans going forward, particularly Oklahoma's vulnerable populations," the agency said.
According to the motion, the parties agreed to pause the suit in the January while the U.S. Supreme Court mulls Rutledge v. PCMA, a case involving an ERISA preemption challenge to an Arkansas law regulating PBMs that was struck down by the Eighth Circuit.
However, while the Supreme Court was originally anticipated to wrap that case up by June, the high court's schedule was disrupted by the outbreak of COVID-19, the disease caused by the novel coronavirus that emerged at the end of 2019, and there was a risk of "an indefinite abeyance," the Insurance Department said.
Additionally, the pandemic also impacted the need to enforce the Patient's Right to Pharmacy Choice Act, according to the agency, which said the state had already received preliminary reports of certain PBMs abusing their market power.
The agency noted that the outbreak "plunged the world into a state of medical and economic emergency" and hit "hardest the areas the PRPCA seeks to protect" — elderly and rural communities.
"Due to all the uncertainty, the state cannot wait until small and rural pharmacies are shuttered by PBM practices to begin investigations and enforcement," the agency said. "Potentially ruinous effects on these communities cannot be undone and will resonate for years to come."
A spokesperson for the PCMA told Law360 in a statement Wednesday that "PBMs are taking real action and working with all members of the prescription drug supply and payment chain to help patients access needed prescription drugs during this global pandemic."
PBMs have providing home delivery of prescriptions without extra cost, temporarily waiving proof-of-receipt requirements except where required by law and supplying information to Rx Open, a resource meant to help patients access medicine during an emergency, among other measures, according to the spokesperson.
PCMA is represented by Joe E. Edwards of Crowe & Dunlevy and Dean Richlin, Kristyn DeFilipp, Andrew London and Stephen Stich of Foley Hoag LLP.
The Oklahoma Insurance Department is represented by Randall J. Yates and Zach West of the Oklahoma Attorney General's Office.
The case is Pharmaceutical Care Management Association v. Mulready et al., case number 5:19-cv-00977, in the U.S. District Court for the Western District of Oklahoma.
--Editing by Bruce Goldman.
For a reprint of this article, please contact reprints@law360.com.
