Attorney General Becerra Issues Statement on Unanimous U.S. Supreme Court Decision Upholding States’ Rights to Regulate the Rising Cost of Prescription Drugs

Thursday, December 10, 2020
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SACRAMENTO — Attorney General Xavier Becerra issued a statement today on the unanimous decision by the United States Supreme Court in Rutledge v. Pharmaceutical Care Management Association that upholds the rights of states to regulate and address the rising cost of prescription drugs. In March, the attorney general led a bipartisan coalition of 46 attorneys general in filing an amicus brief in the Supreme Court supporting the state of Arkansas’ position that federal law does not prevent states from regulating pharmacy benefit managers (PBMs). In the brief, the coalition also argued that regulation of the prescription drug market, including PBMs, is a critical tool states use to protect residents and address the access and affordability of prescription drugs. The Court agreed that federal law does not preempt these widespread and important state regulations.

“States are on the frontlines of the fight to keep prescription drug prices down and make them more accessible to those who rely on them,” said Attorney General Becerra. “We are happy the Supreme Court recognized today that states must be able to regulate PBMs, the pharmaceutical middlemen who manipulate drug prices and access. Today’s decision will ensure states are able to improve prescription drug marketplace transparency and protect access to affordable medication.”

PBMs act as intermediaries between pharmacies, drug manufacturers, health insurance plans, and consumers. They develop and maintain prescription drug formularies, contract with pharmacies, negotiate discounts with drug manufacturers, and process and pay prescription drug claims, and in this position, they have exercised their market power in a manner that harms consumers.

In submitting the amicus brief in March, Attorney General Becerra was joined by the attorneys general of Alabama, Alaska, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and the District of Columbia.

 A copy of the decision can be found here.

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