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On December 10, 2020 the Supreme Court decided Rutledge v. Pharmaceutical Care Management Association. The question presented was whether the Employee Retirement Income Security Act of 1974 (ERISA) pre-empts the State of Arkansas’ Act 900, which regulates the price at which pharmacy benefit managers reimburse pharmacies for the cost of drugs covered by prescription-drug plans. The U.S. Court of Appeals for the Eighth Circuit held that ERISA preemption applied.  By a vote of 8-0, the Supreme Court reversed that judgment and remanded the case.  Writing for the Court, Justice Sotomayor indicated that Act 900 “has neither an impermissible connection with nor reference to ERISA and is therefore not pre-empted.”

Justice Sotomayor’s opinion was joined by all other members of the Court except Justice Barrett, who took no part in the consideration or decision of the case.  Justice Thomas filed a concurring opinion.

Max Schulman, an Associate at Gibson, Dunn & Crutcher, joins us today to discuss this ruling.