Dirk Wilke, Interim State Health Officer of North Dakota, et al. v. Pharmaceutical Care Management Association

In Rutledge v. Pharmaceutical Care Management Association, No. 18-540 (U.S.), this Court granted a writ of certiorari to decide whether the Employee Retirement Income Security Act of 1974 preempts an Arkansas law that regulates the rates that pharmacy benefit managers (PBMs) reimburse pharmacies for dispensing generic drugs. In that case, the Eighth Circuit had held that Arkansas’s law made a prohibited “reference to” ERISA plans and had a forbidden “connection with” such plans. In this case, Respondent sought to enjoin two North Dakota laws that regulate, among other things, certain fees that PBMs charge pharmacies, which drugs pharmacists are allowed to dispense, and what pharmacists are allowed to say to their patients. These laws apply the same standards regardless of whether PBMs are providing services to an ERISA or non-ERISA plan. In ruling in Respondent’s favor, the Eighth Circuit applied its decision in Rutledge to do two things. First, it held that, under Rutledge’s logic, North Dakota’s laws make an impermissible “reference to” ERISA plans because they apply to PBMs serving plans that “include[ ]” ERISA plans. Second, the court held that a finding of preemption under ERISA nullifies a State law “in its entirety”—even as applied to non-ERISA plans. Because of the first holding, the Eighth Circuit elected not to decide whether North Dakota’s laws also had a forbidden “connection with” ERISA plans. And because of the second holding, the Eighth Circuit stated that it did not reach