Merritt: ‘Ruling Strikes a Blow for Quality & Affordability; Upholds PBMs’ Cost Savings & Quality Improvement Techniques’

Washington, DC; 06.21.04 — The US Supreme Court’s decision today to reverse the Fifth Circuit in Aetna Health v. Davila is a milestone in ERISA case law that preserves employers’ ability to custom-design prescription drug plans; helps puts the brakes on unnecessary litigation; and further validates the tools pharmacy benefit managers (PBMs) rely upon to keep prescription drugs affordable and accessible for working families, retirees, and plan sponsors, the Pharmaceutical Care Management Association (PCMA) said today.

“Today’s decision by the Court is a huge loss for the trial lawyers and strikes a blow for all who are concerned about keeping high-quality prescription drug coverage affordable for working families, retirees, and employers,” said PCMA President Mark Merritt. “With this decision, the Court has signaled that predictability and uniformity in employee-benefit design trumps the personal-injury lawyer agenda. This ruling will reverberate across the employee-benefit landscape for years to come.”

PCMA is the national association representing America’s pharmacy benefit managers (PBMs). PBMs administer prescription drug plans for more than 200 million Americans with prescription drug coverage provided through the nation’s small and large employers, Taft-Hartley union plans, health insurers, state and federal-employee benefit plans, and state Medicaid plans. PBMs help drive down the cost of prescription drugs for consumers and plan sponsors by negotiating discounts with drug makers and retail pharmacies. PBMs also provide consumers with important quality protections, such as real-time detection of potentially dangerous drug interactions; disease management; and drug utilization review.

PCMA strongly believes that today’s ruling helps further validate the tools and techniques PBMs rely upon to keep prescription drugs affordable and accessible for working families and retirees. One key tool validated by the Court lies with a plan’s use of “step therapy,” whereby a physician moves progressively from less costly drug regimens to more expensive therapies. Drug plans’ use of step therapy is a well-established principle throughout the entire medical field and is a common-sense approach that uses scarce health care resources most effectively.

In addition to preserving employers’ ability to custom-design employee benefit plans and affirming the PBM architecture, today’s ruling also upholds the integrity of current health-benefit appeals processes available to consumers under ERISA. Aided and abetted by the trial bar, the plaintiff in this case completely bypassed every avenue available to him to resolve this coverage dispute quickly and instead fast-tracked this case to the nearest courtroom. PCMA is hopeful this ruling could help stem the tide of unnecessary litigation.

As background, the Employee Retirement Income Security Act (ERISA) is a landmark law employers have relied upon for three decades to voluntarily provide high-quality, affordable health care benefits to their workers and dependents. Signed into law in 1974 with bipartisan support, ERISA has been an important conduit for employers to provide affordable, quality health care for their workers and retirees and to assure consumers the same uniform rights and protections no matter where they reside. Bolstered by today’s ruling, case law is well-established regarding the principle of ERISA pre-emption over conflicting state laws and the preservation of high-quality, affordable health care coverage for millions of Americans.

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmaceutical benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614