/>iOn July 29, 2024, Pharmaceutical Care Management Association (“PCMA”) filed an opposition to Oklahoma’s petition for writ of certiorari in the United States Supreme Court, seeking review of the Tenth Circuit decision PCMA v. Mulready, 78 F.4th 1183 (10th Cir. 2023). Oklahoma seeks review of both ERISA and Medicare Part D preemption.[1]
Mulready held that Medicare preempted Oklahoma’s Any Willing Pharmacy provision (“Challenged AWP”), which requires a Pharmacy Benefit Manager (“PBM”) to allow the participation of pharmacies into preferred pharmacy networks.[2] Mulready reasoned that Medicare Part D preemption is akin to field preemption and does not require an overlapping federal and state standard to conclude that the state law is preempted.[3] Applying field preemption, Mulready concluded that the Challenged AWP “detracts from the integrated scheme of [Medicare] regulations” by regulating Part D plans above what Medicare laws and regulations require, and as the state law did not concern licensing or plan solvency, it was preempted.
Mulready could have stopped there but doesn’t. Mulready further held that under a conflict preemption standard, the Challenged AWP would still be preempted for Medicare Part D plans because Medicare has its own Any Willing Pharmacy provision (“Medicare AWP”),[4] and other regulations[5] that require Medicare Part D plans (and associated PBM) to allow pharmacies to participate in standard pharmacy networks but does not require participation in preferred networks.
Oklahoma’s Petition asserts that a “textbook circuit split on the scope of Medicare Part D preemption” exists with the Tenth Circuit (Mulready) and First Circuit (Hernandez)[6] holding that no conflicting federal standard is required with the Eighth Circuit (Rutledge, Wehbi)[7] requiring that the challenged state law regulate the same subject matter as a federal Medical Part D standard in order to find preemption. Aside from the different view on the scope of Medicare Part D preemption, the Petition also asserts that the Tenth Circuit’s alternative application of conflict preemption differs from the Eighth Circuit’s approach. The Petition asserts that the Eighth Circuit viewed Medicare AWP as “highly general language” that “indicates an intent to leave to the states the specifics of what plans and PBMs may or may not demand of pharmacies.” As argued by Oklahoma, Mulready viewed Medicare’s AWP requirement as demonstrating that “CMS has established guidelines about how Part D plan sponsors must construct their networks” and thus the state law requiring participation in preferred networks was sufficiently close to preempt it.
PCMA’s opposition asserts that there is no circuit conflict with the Tenth Circuit (Mulready), Eighth Circuit (Wehbi), and First Circuit (Hernandez) agreeing that “Medicare statute’s express preemption clause mandates field preemption.” As to the Tenth and Eighth Circuits’ differing views on Medicare AWP and application to the challenged state statutes, PCMA asserts that “case-specific squabbles over the workings of state statutes is unworthy of [the Supreme Court’s] attention.” As urged by PCMA, at most, Oklahoma describes circuit differences in applying a “common legal standard”—field preemption—to “substantively different state statutes.”
Supreme Court rules specifically provide that one of the “compelling reasons” to grant certiorari is the existence of a circuit split.[8] However, not all circuit splits are viewed equally. The late Justice Ruth Bader Ginsburg informed that the Supreme Court takes “cases primarily to keep federal law fairly uniform, to resolve strong disagreements—splits not likely to heal—among federal or state tribunals over the meaning of a federal statute or executive regulation, or constitutional provision” with about 70 percent of the cases heard involving circuit splits or disagreements amount state high courts.[9] The Supreme Court is less likely to accept review of a circuit split that is new or involves only a few courts,[10] or those without “a deep split.”[11] The Supreme Court also considers whether the conflict is a matter of great public import or concern a legally important issue.[12]
Presumably, if the Supreme Court Calls for the Views of the Solicitor General, which PCMA urges is unnecessary due to the Government’s brief submitted to the Tenth Circuit below, the Solicitor General would side with PCMA and recommend denial of the Petition. At the invitation of the Tenth Circuit, the Government’s amicus curiae brief asserted that Medicare preempted the Challenged AWP as applied directly or indirectly to Medicare Part D plans.[13] The Government argued that the Challenged AWP is inconsistent with standards that CMS issued to govern pharmacy networks for Part D plans. Thus, because the Government determined that there was a direct conflict between the Challenged AWP and CMS standards, including Medicare’s AWP, the Government did not opine on whether a broader Medicare preemption theory should apply. Consistent with PCMA’s position, the Government may believe that Supreme Court review is not warranted in Mulready as the question presented does not depend upon any alleged circuit split.
A Supreme Court decision denying certiorari leaves Mulready in place. Four Justices must decide to review Mulready in order for the Petition to be granted. If the Justices believe that the Tenth Circuit’s decision was correct in its field preemption ruling, or agree with the Government’s amicus brief that the case can be resolved without tackling any perceived circuit split, or question whether Oklahoma’s asserted circuit split is sufficiently deep or sufficiently developed for the Court’s review, the Court is more likely to deny certiorari.
[1] Congress enacted an explicit statutory express preemption law for Medicare Part D. See 42 U.S.C. § 1395w-26(b)(3) (“The standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA plans which are offered by MA organizations under this part.”); 42 U.S.C. § 1395w-112(g) (applying § 1395w-26(b)(3) to Medicare Part D plans); see also 42 C.F.R. § 423.440(a) (“The standards established under this part supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) for Part D plans offered by Part D plan sponsors.”).
[2] 78 F.4th at 1206.
[3] Id.
[4] 42 U.S.C. § 1395w-104(b)(1)(A) (“A prescription drug plan shall permit the participation of any pharmacy that meets the terms and conditions under the plan.”); 42 C.F.R. § 423.505(b)(18) (Part D sponsor agrees to “have a standard contract with reasonable and relevant terms and conditions of participation whereby any willing pharmacy may access the standard contract and participate as a network pharmacy”) (collectively “Medicare AWP”).
[5] Id. at 1209 (citing 42 U.S.C. § 1395w-104(b)(1)(B); 42 C.F.R. § 423.120(a)(8)(i), (a)(9); C.F.R. § 423.100 (definition of preferred pharmacy)).
[6] Medicaid and Medicare Advantage Prods Ass’n of P.R. v. Hernandez, 58 F.4th 5, 12 (1st Cir. 2023) (“Hernandez”).
[7] PCMA v. Rutledge, 891 F.3d 1109, 1113-1114 (8th Cir. 2018), rev’d on other grounds, 592 U.S. 80 (2020) (“Rutledge”); PCMA v. Wehbi, 18 F.4th 956, 971 (8th Cir. 2021) (“Wehbi”). In Rutledge and Wehbi, no party requested Supreme Court review of the Circuit Court’s Medicare preemption ruling.
[8] S. Ct. R. 10(a).
[9] Ruth Bader Ginsburg, Workways of the Supreme Court Thomas Jefferson School of Law San Diego February 6, 2003, 25 T. Jefferson L. Rev. 517, 521 (2003).
[10] Notably, the petition for writ of certiorari for the Supreme Court’s recent decision in Smith v. Spizzirri, 601 U.S. 472 (2024), described a 6-4 circuit conflict with the Ninth Circuit disagreeing with precedent from the Second, Third, Sixth, Seventh, Tenth, and Eleventh Circuits and joining the First, Fifth, and Eighth Circuits, with the Ninth Circuit urging “the Supreme Court to take up this question”– an issue that the Court had twice confronted, but reserved a definitive ruling. Smith v. Spizzirri, Petition for a Writ of Certiorari, Case No. 22-1218, 2023 WL 4108513 (June 14, 2023).
[11] Michael R. Dreeben, Statement to the Presidential Commission on the Supreme Court, June 25, 2021, p. 9-10, available at http://www.whitehouse.gov/wp-content/uploads/2021/Dreeben-Statement-for-the-Presidential-Commission-on-the-Supreme-Court-6.25.2021.pdf (last visited June 30, 2024).
[12] S. Ct. R. 10(c).
[13] Brief for Amicus Curiae the United States in Support of Neither Party Urging Affirmance in Part and Reversal in Part, United States court of Appeals for the Tenth Circuit, Case No. 22-6074, filed April 10, 2023.
