WASHINGTON — After years of struggling to regulate the drug middlemen that create pharmacy networks, the federal government could lean on states to rein them in — even, potentially, in Medicare. The Department of Justice has until next month to tell a federal appeals court where the administration stands on the issue.
Insurers determine what drugs are covered, where their customers can obtain these drugs, and how much drug costs their customers must pay for. After years of complaints from independent pharmacies, both state and federal lawmakers have become increasingly interested in opening up pharmacy networks.
The Supreme Court at the end of 2020 handed a significant win to states by ruling that federal law does not preempt an Arkansas law from requiring pharmacy benefit managers to pay pharmacies no less than their acquisition costs for prescription drugs. Pharmacy benefit managers are the companies that insurers hire to negotiate drug rebates and pharmacy fees by creating formularies and pharmacy networks.
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