Bass, Berry and Sims attorneys Susan Bilbro, Douglas Dahl and Catherine Simpson authored an article for Law360 examining the recent Pharmaceutical Care Management Association v. Mulready case that ruled in favor of self-funded health plans through Employee Retirement Income Security Act preemption. ERISA allows companies to administer plans nationally in a uniform manner. In the case, Oklahoma’s Patients’ Right to Pharmacy Choice Act sought to police pharmacy benefit managers (PBMs) by prohibiting them from directing clients to specific pharmacies that were in-network, creating geographic parameters and requiring them to admit any pharmacy that follows the terms of the PBM to their network.

The court ultimately ruled in favor of self-funded plans and held that ERISA preempted the provisions of the Oklahoma law as they found its restrictions of PBMs would indirectly affect ERISA plans.

The authors outline the reasons the “decision in Mulready is a win for both PBMs and employers that operate self-funded plans” saying “rulings like the one in Mulready allow employers to not only offer consistent pharmacy benefits across their employee populations, but also to take advantage of current methods used by PBMs to, as the court put it, ‘keep plans’ costs low,’ and work together with PBMs to continue to innovate on cost-cutting ideas.”

“The court’s decision in Mulready is a well-reasoned application of prior precedent and will likely be cited in a number of lawsuits going forward, despite not having a binding effect outside the Tenth Circuit,” the attorneys conclude.

The full article, “10th Circ. ERISA Ruling Is Promising For Self-Funded Plans,” was published by Law360 on September 26 and is available online.