Amid debate over prescription drug costs, the U.S. Supreme Court will hear a closely watched case on Tuesday that is expected to determine the extent to which the states can regulate pharmacy benefit managers, the controversial middlemen in the pharmaceutical supply chain.
At issue is an Arkansas law that governs reimbursements rates that pharmacy benefit managers, or PBMs, must pay to pharmacies. The law requires PBMs to reimburse pharmacies at or above their wholesale costs paid for generic drugs. It also prevents them from paying their own drug stores more than what is paid to other pharmacies. CVS Health, for instance, owns a PBM and pharmacies.