Pharmaceutical Care V Mulready, Et Al, Docket No 22-06074 (10th

Appellate Case: 22-6074 Document: 010110841003 Date Filed: 04/10/2023 Page: 1
No. 22-6074
IN THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT
PHARMACEUTICAL CARE MANAGEMENT ASSOCIATION,
Plaintiff-Appellant,
v.
GLEN MULREADY, in his official capacity as

Insurance Commissioner of Oklahoma, and
OKLAHOMA INSURANCE DEPARTMENT,
Defendants-Appellees.
On Appeal from the United States District Court

for the District of Oklahoma
[5:19-cv-977-J (Judge Bernard M. Jones)]
BRIEF FOR AMICUS CURIAE THE UNITED STATES

IN SUPPORT OF NEITHER PARTY
URGING AFFIRMANCE IN PART AND REVERSAL IN PART
SEEMA NANDA BRIAN M. BOYNTON

Solicitor of Labor Principal Deputy Assistant Attorney General
WAYNE R. BERRY BENJAMIN W. SNYDER
Acting Associate Solicitor for Plan Benefits Assistant to the Solicitor General
Security ALISA B. KLEIN
JEFF HAHN ANNA O. MOHAN
GARRETT TRAUB Attorneys, Appellate Staff
ISIDRO MARISCAL Civil Division, Room 7533
Attorneys U.S. Department of Justice
Office of the Solicitor 950 Pennsylvania Avenue NW
Plan Benefits Security Division Washington, DC 20530
U.S. Department of Labor (202) 514-3159
200 Constitution Ave., N.W.
Washington, D.C. 20210
(202) 961-5182
TABLE OF CONTENTS
Page
INTEREST OF THE UNITED STATES ..........................................................................1
STATEMENT OF THE CASE .............................................................................................1
A. ERISA .................................................................................................................. 1
B. Medicare Part D ................................................................................................. 4
C. Provisions of Oklahoma Law at Issue on Appeal ........................................ 7
D. Prior Proceedings ............................................................................................... 8
ARGUMENT ............................................................................................................................9
I. ERISA Does Not Preempt the Probation-Based Pharmacy Limitation

Prohibition and Preempts the Other Three Challenged Provisions Only
as Applied Directly to ERISA Plans ...........................................................................9
A. ERISA Does Not Preempt the Probation-Based Pharmacy

Limitation Prohibition....................................................................................... 9
B. ERISA Preempts the Any Willing Provider Provision, Retail-Only

Pharmacy Access Standards, and Cost-Sharing Discount
Prohibition Only as Applied Directly to ERISA Plans..............................11
1. The Any Willing Provider Provision, Retail-Only Pharmacy

Access Standards, and Cost-Sharing Discount Prohibition
“Relate to” ERISA Plans ....................................................................12
2. The Any Willing Provider Provision, Retail-Only Pharmacy

Access Standards, and Cost-Sharing Discount Prohibition
Are Saved from Preemption Except as Applied Directly to
ERISA Plans .........................................................................................17
II. The Medicare Statute Expressly Preempts the Oklahoma Law’s Any
Willing Provider Provision as Applied to Part D Plans........................................ 22
CONCLUSION ..................................................................................................................... 27
CERTIFICATE OF COMPLIANCE
CERTIFICATE OF SERVICE
ii
TABLE OF AUTHORITIES
Cases: Page(s)
California Div. of Labor Standards Enf’t v. Dillingham Const., N.A., Inc.,
519 U.S. 316 (1997) ..................................................................................................... 3, 16
CIGNA Healthplan of La., Inc. v. State of Louisiana,
82 F.3d 642 (5th Cir. 1996) ............................................................................................. 14
Crosby v. National Foreign Trade Council,
530 U.S. 363 (2000) .......................................................................................................... 24
Do Sung Uhm v. Humana, Inc.,
620 F.3d 1134 (9th Cir. 2010) .................................................................................. 24, 26
FMC Corp. v. Holliday,
498 U.S. 52 (1990) .......................................................................................... 14-15, 20, 21
Fuller v. Norton,
86 F.3d 1016 (10th Cir. 1996) .................................................................................... 4, 20
Geier v. American Honda Motor Co.,
529 U.S. 861 (2000)............................................................................................................ 24
Gobeille v. Liberty Mut. Ins. Co.,
577 U.S. 312 (2016) ..................................................................................................... 2, 10
John Hancock Mut. Life Ins. Co. v. Harris,
510 U.S. 87 (1993) ............................................................................................................... 3
Kentucky Ass’n of Health Plans v. Miller,
538 U.S. 329 (2003) ............................................................................ 3, 14, 17, 18, 19, 20
Kentucky Ass’n of Health Plans, Inc. v. Nichols,
227 F.3d 352 (6th Cir. 2000), aff’d,
538 U.S. 329 (2003) .................................................................................................... 13-14
Metropolitan Life Ins. Co. v. Massachusetts,
471 U.S. 724 (1985) .......................................................................................................... 20
New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,
514 U.S. 645 (1995) ..................................................................................................... 2, 14
PCMA v. District of Columbia,
613 F.3d 179 (D.C. Cir. 2010) ......................................................................................... 16
iii
PCMA v. Wehbi,
18 F.4th 956 (8th Cir. 2021) .................................................................. 10, 11, 16, 17, 25
Prudential Ins. Co. of Am. v. National Park Med. Ctr., Inc.,
154 F.3d 812 (8th Cir. 1998) ........................................................................................... 14
Prudential Ins. Co. of Am. v. National Park Med. Ctr., Inc.,
413 F.3d 897 (8th Cir. 2005) ........................................................................................... 21
Rush Prudential HMO, Inc. v. Moran,
536 U.S. 355 (2002) ..................................................................................................... 3, 21
Rutledge v. PCMA,
141 S. Ct. 474 (2020) .............................................................................. 10, 11, 12, 13, 15
Shaw v. Delta Air Lines, Inc.,
463 U.S. 85 (1983) ........................................................................................................ 9, 11
Stuart Circle Hosp. Corp. v. Aetna Health Mgmt.,
995 F.2d 500 (4th Cir. 1993) ........................................................................................... 14
Statutes:
Employee Retirement Income Security Act of 1974 (ERISA):

29 U.S.C. § 1001 et seq. ....................................................................................................... 1
29 U.S.C. § 1002(1) ......................................................................................................... 2
29 U.S.C. § 1003(a) ......................................................................................................... 2
29 U.S.C. § 1144(a) .............................................................................................. 1, 9, 13
29 U.S.C. § 1144(b)(2)(A) ....................................................................................... 3, 17
29 U.S.C. § 1144(b)(2)(B) ................................................................................. 4, 17, 20
29 U.S.C. § 1185a(a)(3)(A) .......................................................................................... 13
29 U.S.C. § 1185a(a)(7)(C)(ii) ...................................................................................... 13
Medicare Prescription Drug, Improvement, and Modernization Act of 2003,
Pub. L. 108-173, tit. I, 117 Stat. 2066, 2071-2176 ............................................................ 4
§ 232(a), 117 Stat. at 2208................................................................................................ 6
42 U.S.C. § 1395w-26(b)(3) .................................................................... 6, 24, 25, 26
42 U.S.C. § 1395w-104(b)(1)(A) ......................................................................... 5, 22
42 U.S.C. § 1395w-104(b)(1)(B) .............................................................................. 23
42 U.S.C. § 1395w-112 ................................................................................................ 4
42 U.S.C. § 1395w-112(g) ....................................................................... 6, 24, 25, 26
iv
Patient’s Right to Pharmacy Choice Act:

Okla. Stat. tit. 36, § 6958 et seq. .................................................................................... 1, 7
§ 6960(4) .................................................................................................................... 8, 16
§ 6961 ............................................................................................................................. 16
§ 6961(A)-(B) ............................................................................................................ 7, 12
§ 6962(B)(4) ........................................................................................................ 7, 12, 22
§ 6962(B)(5) ..................................................................................................................... 7
§ 6963(A) ........................................................................................................................ 19
§ 6963(B) ........................................................................................................................ 19
§ 6963(E) ................................................................................................................... 8, 12
Regulations:
42 C.F.R. § 423.100 .......................................................................................................... 5, 23

42 C.F.R. § 423.120(a)(8) ................................................................................................. 6, 22
42 C.F.R. § 423.120(a)(9) ...................................................................................................... 23
42 C.F.R. § 423.505(b)(18) .............................................................................................. 6, 22
42 C.F.R. § 423.505(i) ........................................................................................................... 25
Other Authorities:
Advisory Council on Emp. Welfare & Pension Benefit Plans, PBM Compensation
and Fee Disclosure (2014), https://perma.cc/5T7A-SATY............................................... 5
Medicare Program; Medicare Prescription Drug Benefit,
70 Fed. Reg. 4194 (Jan. 28, 2005) .......................................................................... 5, 6, 24
Medicare Program; Contract Year 2015 Policy and Technical Changes to the
Medicare Advantage and the Medicare Prescription Drug Benefit Programs,
79 Fed. Reg. 29,844 (May 23, 2014) ............................................................................... 25
U.S. Gov’t Accountability Office, GAO-19-498, Medicare Part D:

Use of Pharmacy Benefit Managers and Efforts to Manage Drug Expenditures
and Utilization (2019), https://perma.cc/9Z99-RCSW ................................................... 5
v
GLOSSARY
AWP Any Willing Provider

CMS Centers for Medicare & Medicaid Services
ERISA Employee Retirement Income Security Act of 1974
HMO Health Maintenance Organization
PBM Pharmacy Benefit Manager
PCMA Pharmaceutical Care Management Association
INTEREST OF THE UNITED STATES
The United States respectfully submits this brief in response to this Court’s
invitation to set forth its views as to whether provisions of Oklahoma’s Patient’s
Right to Pharmacy Choice Act, Okla. Stat. tit. 36, § 6958 et seq., are preempted by the
Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.,
and/or Medicare Part D. In the view of the United States, ERISA does not preempt
the Probation-Based Pharmacy Limitation provision in any respect. ERISA does
preempt the Any Willing Provider (AWP) provision, Retail-Only Pharmacy Access
Standards, and Cost-Sharing Discount Prohibition to the limited extent that those
provisions apply directly to ERISA plans themselves, but does not preempt
application of those provisions to third-party pharmacy benefit managers (PBMs).
Finally, the Medicare statute preempts the AWP provision as applied directly or
indirectly to Medicare Part D plans because that provision is inconsistent with
standards that the Centers for Medicare & Medicaid Services (CMS) issued to govern
pharmacy networks for Part D plans.
STATEMENT OF THE CASE
A. ERISA
With specified exceptions, ERISA preempts “any and all State laws insofar as
they may now or hereafter relate to any employee benefit plan described in section
1003(a) of [Title 29].” 29 U.S.C. § 1144(a). The “employee benefit plan” described
in Section 1003(a) includes one that is “established or maintained” by an “employer”
that is “engaged in commerce or in any industry or activity affecting commerce.” Id.
§ 1003(a). In particular, it includes an “employee welfare benefit plan” established or
maintained by an employer for the purpose of providing “medical” benefits “through
the purchase of insurance or otherwise.” Id. § 1002(1). Sponsors of ERISA-governed
health-benefit plans often retain PBMs to administer their plan’s prescription drug
benefits, including by providing a network of pharmacies at which plan participants
can obtain drugs at favorable rates and processing prescription drug claims. See
Advisory Council on Emp. Welfare & Pension Benefit Plans, PBM Compensation and
Fee Disclosure (2014), https://perma.cc/5T7A-SATY.
In construing ERISA’s express preemption provision, the Supreme Court has
said that the provision’s broad “relates to” language cannot extend “to the furthest
stretch of its indeterminacy,” because such an interpretation would preempt
practically all state laws, as any law could “relate to” ERISA plans in some manner.
New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S.
645, 655 (1995). Instead, a state law impermissibly “relates to” an ERISA plan if it
either has a “connection with,” or makes “reference to,” such a plan. Id. A state law
has an impermissible “connection with” ERISA plans if it “governs a central matter
of plan administration,” thereby “interfer[ing] with nationally uniform plan
administration.” Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 320 (2016); Travelers, 514
U.S. at 656-57. A state law makes impermissible “reference to” a plan if it acts
2
“immediately and exclusively” upon ERISA plans or if the existence of ERISA plans
is “essential to the law’s operation.” California Div. of Labor Standards Enf’t v. Dillingham
Const., N.A., Inc., 519 U.S. 316, 325 (1997).
However, ERISA’s preemption provision contains a savings clause, 29 U.S.C.
§ 1144(b)(2)(A), that “reclaims [to the States] a substantial amount of ground” that the
preemption provision’s broad “relates to” language otherwise would take away. Rush
Prudential HMO, Inc. v. Moran, 536 U.S. 355, 364 (2002). The savings clause provides
that “nothing in this subchapter shall be construed to exempt or relieve any person
from any law of any State which regulates insurance, banking, or securities.” 29 U.S.C.
§ 1144(b)(2)(A). By saving state laws that “regulate[] insurance,” the savings clause
“leaves room for complementary or dual federal and state regulation.” John Hancock
Mut. Life Ins. Co. v. Harris, 510 U.S. 87, 99 (1993).
The Supreme Court has articulated a two-part test to determine whether a law
is saved as an insurance regulation even if it “relates to” ERISA plans in the first
instance. See Kentucky Ass’n of Health Plans v. Miller, 538 U.S. 329 (2003). First, the state
law must “be specifically directed toward entities engaged in insurance.” Id. at 342.
This “does not require that a state law regulate ‘insurance companies’ or even ‘the
business of insurance’ to be saved from preemption; it need only be a ‘law . . . which
regulates insurance.’” Id. at 336 n.1 (emphases omitted). Second, the state law must
“substantially affect the risk pooling arrangement between the insurer and the
insured.” Id. at 342.

3
While ERISA’s savings clause carves out large exceptions from the broad reach
of ERISA preemption, the so-called “deemer clause” in turn limits the scope of the
savings clause. It provides that an employee benefit plan shall not be “deemed to be
an insurance company . . . or to be engaged in the business of insurance . . . for
purposes of any law of any State purporting to regulate insurance companies.” 29
U.S.C. § 1144(b)(2)(B). “In this fashion Congress satisfied its goal of reserving to the
states regulation of the business of insurance and protecting ERISA plans themselves
from being subjected to state and local regulation.” Fuller v. Norton, 86 F.3d 1016,
1024 (10th Cir. 1996). As a result, a state law may be generally saved from preemption
as a law regulating insurance but remain preempted to the extent it seeks to regulate
ERISA plans directly.
B. Medicare Part D
The Medicare program, which Congress established through Title XVIII of the
Social Security Act, provides federally subsidized health insurance for persons who are
65 or older or who have a disability. In 2003, Congress amended the statute to add a
prescription drug benefit, known as Medicare Part D. See Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, Pub. L. 108-173, tit. I, 117 Stat. 2066,
2071-2176. Under Part D, private health insurance companies, called plan sponsors,
enter into contracts with CMS to offer prescription drug plans to Medicare
beneficiaries. See 42 U.S.C. § 1395w-112.
4
Part D plan sponsors frequently contract with PBMs to manage pharmacy
benefits on their behalf, including by negotiating contracts with pharmacies and
constructing pharmacy networks. U.S. Gov’t Accountability Office, GAO-19-498,
Medicare Part D: Use of Pharmacy Benefit Managers and Efforts to Manage Drug Expenditures
and Utilization 2 (2019), https://perma.cc/9Z99-RCSW (reporting that as of 2016,
Part D sponsors used PBMs to provide 74% of drug benefit management services).
Part D plans and their PBMs often construct networks of “preferred” and
“nonpreferred” pharmacies. See Medicare Program; Medicare Prescription Drug
Benefit, 70 Fed. Reg. 4194, 4254 (Jan. 28, 2005) (final rule). “Preferred” pharmacies
are network pharmacies that offer prescription drugs to Part D enrollees at lower
levels of cost-sharing than non-preferred in-network pharmacies, meaning that
beneficiaries have lower out-of-pocket costs when they fill their prescriptions there.
42 C.F.R. § 423.100 (defining network pharmacy, preferred pharmacy, and non-
preferred pharmacy).
The Part D statute and its implementing regulations address the pharmacy
networks established by or on behalf of Part D plans. The statute provides that “[a]
prescription drug plan shall permit the participation” in its network “of any pharmacy
that meets the terms and conditions under the plan.” 42 U.S.C. § 1395w-104(b)(1)(A).
CMS’s implementing regulations impose an “any willing pharmacy” requirement,
mandating that plans allow any pharmacy to participate in their standard networks if
the pharmacy is willing to accept the same terms and conditions as other pharmacies.
5
See 42 C.F.R. § 423.505(b)(18) (requiring that Part D plans 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”); id. § 423.120(a)(8) (providing that, in “establishing its contracted
pharmacy network,” a Part D sponsor offering qualified prescription drug coverage
“[m]ust contract with any pharmacy that meets the Part D sponsor’s standard terms
and conditions”). In establishing that requirement, CMS considered but expressly
declined to require that Part D plans allow any willing pharmacy to participate in their
networks as a “preferred” pharmacy. See 70 Fed. Reg. at 4254.
The 2003 Medicare amendments also modified a pre-existing preemption
provision contained in Part C (governing Medicare benefits for services provided
through health management organizations) and made that amended provision apply
“in the same manner” to the new Part D. See Pub. L. 108-173, § 232(a), 117 Stat. at
2208 (amending 42 U.S.C. § 1395w-26(b)(3)); 42 U.S.C. § 1395w-112(g) (incorporating
42 U.S.C. § 1395w-26(b)(3)). As amended, the preemption provision reads:
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 . . . plans which are offered by . . .
organizations under this part.
42 U.S.C. § 1395w-26(b)(3). The Medicare Part D statute thus provides that CMS-
established standards relating to Part D supersede state laws or regulations (other than
6
state licensing laws or laws relating to plan solvency) “with respect to” a prescription
drug plan offered by a Part D sponsor.
C. Provisions of Oklahoma Law at Issue on Appeal
In 2019, Oklahoma enacted the Patient’s Right to Pharmacy Choice Act, Okla.
Stat. tit. 36, § 6958 et seq., to regulate the practices of PBMs. Four provisions of that
law are at issue in this appeal.
Three of the provisions involve the structure or composition of PBMs’
pharmacy networks. First, the Retail-Only Pharmacy Access Standards require that
PBMs design their pharmacy networks so that a certain percentage of covered
individuals live within a set geographical distance from at least one brick-and-mortar
pharmacy within the network. Okla. Stat. tit. 36, § 6961(A)-(B). Second, the
Probation-Based Pharmacy Limitation Prohibition makes it unlawful for PBMs to
deny, limit, or terminate a contract with a pharmacy because a pharmacist employed
with the pharmacy is on “probation status with the State Board of Pharmacy.” Id.
§ 6962(B)(5). Lastly, the AWP provision requires PBMs to admit to their preferred
networks any pharmacy that “is willing to accept the terms and conditions that the
PBM has established for other providers as a condition of preferred network
participation status.” Id. § 6962(B)(4).
The fourth provision, the Cost-Sharing Discount Prohibition, concerns the
cost-sharing rules applicable to prescription drug benefits. It prohibits PBMs and
health insurers from requiring, or incentivizing the use of, “any discounts in cost-
7
sharing or a reduction in copay or the number of copays to individuals to receive
prescription drugs from an individual’s choice of in-network pharmacy.” Okla. Stat.
tit. 36, § 6963(E).
For purposes of the challenged provisions, the Act defines “pharmacy benefits
manager” as a “person that performs pharmacy benefits management” and “any other
person acting” for them. Okla. Stat. tit. 36, § 6960(4).
D. Prior Proceedings
Pharmaceutical Care Management Association (PCMA), a trade association
representing PBMs, challenged several provisions of the Oklahoma law as preempted
by ERISA and Medicare Part D, including the four provisions at issue in this appeal.
The district court granted summary judgment partially in favor of PCMA and partially
in favor of Oklahoma.
The district court held that ERISA did not preempt any of the provisions at
issue in this appeal because “[w]hile these provisions may alter the incentives and limit
some of the options that an ERISA plan can use, none of the provisions forces
ERISA plans to make any specific choices.” Op. 4, Aplt.App. Vol. 3, at 737.
As to Medicare Part D, the district court held that the AWP provision is not
preempted. The court acknowledged that “Part D has an any willing provider
standard in relation to a plan’s standard network” but reasoned that Oklahoma’s
provision “relates to the preferred network rather than the standard network.” Op. 7,
Aplt.App. Vol. 3, at 740. The court concluded that the AWP provision “does not act
8
‘with respect to’ the Part D any willing provider standard and is not preempted by
Medicare Part D.” Id.1
ARGUMENT
I. ERISA Does Not Preempt the Probation-Based Pharmacy

Limitation Prohibition and Preempts the Other Three Challenged
Provisions Only as Applied Directly to ERISA Plans
ERISA does not preempt the Oklahoma law’s Probation-Based Pharmacy
Limitation Prohibition because that provision neither makes “reference to” nor has a
“connection with” ERISA plans, and thus does not “relate to” ERISA plans within
the meaning of statute’s preemption provision. Shaw v. Delta Air Lines, Inc., 463 U.S.
85, 96-97 (1983); 29 U.S.C. § 1144(a). While the other three challenged provisions do
have a “connection with” ERISA plans, those provisions are saved from preemption
under ERISA’s insurance savings clause except to the extent they apply to ERISA
plans that directly engage in covered conduct.
A. ERISA Does Not Preempt the Probation-Based Pharmacy

Limitation Prohibition
A state law impermissibly “relates to” an ERISA plan under the statute’s
express preemption provision if the law either makes “reference to” or has a
“connection with” an ERISA plan. Shaw, 463 U.S. at 96-97. PCMA does not contend
that the Probation-Based Pharmacy Limitation Prohibition makes “reference to”
1
The district court addressed whether certain other provisions were preempted
by Medicare Part D, Op. 6-9, Aplt.App. Vol. 3, at 739-42, but the only Part D
preemption challenge in this appeal involves the AWP provision.
9
ERISA plans, and as explained below, that prohibition also does not have an
impermissible “connection with” ERISA plans.
A state law has a “connection with” ERISA plans if it “governs a central matter
of plan administration,” thereby “interfer[ing] with nationally uniform plan
administration.” Gobeille v. Liberty Mut. Ins. Co., 577 U.S. 312, 319 (2016). Laws that
“require providers to structure benefit plans in particular ways” impermissibly intrude
on plan administration and preclude national uniformity, and thus come within the
scope of ERISA’s express preemption provision. Rutledge v. PCMA, 141 S. Ct. 474,
480 (2020). In contrast, laws “that merely increase costs or alter incentives for ERISA
plans without forcing plans to adopt any particular scheme of substantive coverage”
are not preempted. Id.
The Probation-Based Pharmacy Limitation Prohibition is not subject to
preemption under those standards. While that prohibition eliminates one possible
basis for excluding a pharmacy from a PBM’s network (i.e., a pharmacist’s probation
status), it does not mandate the inclusion of any pharmacy or class of pharmacies.
Any impact it may have on pharmacy-benefit design is accordingly de minimis at most,
and the prohibition does not “require providers to structure benefit plans in particular
ways.” Rutledge, 141 S. Ct. at 480.
That conclusion aligns with the Eighth Circuit’s decision in PCMA v. Wehbi, 18
F.4th 956 (8th Cir. 2021), which held that ERISA did not preempt a similar North
Dakota provision prohibiting PBMs from requiring pharmacies, as a condition of

10
network participation, to satisfy accreditation standards inconsistent with those
imposed by North Dakota law. The Eighth Circuit explained that the provision
regulates a “non-central” matter of plan administration and found that any “modest
disuniformity” it causes “does not warrant preemption.” Id. at 968; cf. Rutledge, 141 S.
Ct. at 480 (“[N]ot every state law that affects an ERISA plan or causes some
disuniformity in plan administration has an impermissible connection with an ERISA
plan.”). PCMA identifies no sound basis for reaching a contrary result here.
B. ERISA Preempts the Any Willing Provider Provision, Retail-

Only Pharmacy Access Standards, and Cost-Sharing Discount
Prohibition Only as Applied Directly to ERISA Plans
Unlike the Probation-Based Pharmacy Limitation Prohibition, the AWP
provision, Retail-Only Pharmacy Access Standards, and Cost-Sharing Discount
Prohibition do have a “connection with” ERISA plans, and thus “relate to” ERISA
plans within the meaning of the statute’s express preemption provision, Shaw, 463
U.S. at 97, because they impose requirements on plan structure and benefit design and
thereby impair national uniformity. Those provisions are nevertheless saved from
preemption under ERISA’s insurance savings clause, except to the extent they apply
to ERISA plans that directly engage in covered conduct themselves.
11
1. The Any Willing Provider Provision, Retail-Only

Prohibition “Relate to” ERISA Plans
a. The AWP, Retail-Only, and Cost-Sharing provisions have a connection with
ERISA plans because they “require providers to structure benefit plans in particular
ways” that are central to plan administration. Rutledge, 141 S. Ct. at 480.
The AWP provision and Retail-Only Pharmacy Access Standards affirmatively
dictate the scope of a plan’s pharmacy network. The AWP provision mandates the
inclusion in preferred pharmacy networks of all pharmacies willing to abide by the
terms for preferred network participation. Okla. Stat. tit. 36, § 6962(B)(4). And under
the Retail-Only Pharmacy Access Standards, pharmacy networks must include a
sufficient number of brick-and-mortar pharmacies proximately located to covered
individuals. Id. § 6961(A)-(B).
The Cost-Sharing Discount Prohibition is similarly prescriptive. That provision
requires that cost-sharing and copayment rules be the same as between retail and mail-
order pharmacies. Okla. Stat. tit. 36, § 6963(E). It therefore precludes plans from
offering differential cost-sharing terms to participants based on their choice of
provider. See Okla. Br. 30.
Those types of choices about pharmacy-network composition and cost-sharing
terms go to core aspects of plan structure and benefit design, as they directly regulate
the terms of participants’ coverage—i.e., where and under what cost-sharing terms
participants can obtain covered prescription drugs. Indeed, their centrality to plan
12
structure and benefit design is reflected in ERISA itself. For example, in 2020,
Congress amended ERISA to require agency guidance on how group health plans and
issuers can ensure that certain plan features comply with ERISA’s mental health parity
requirements, specifically naming “network admission standards” and factors relating
to “network adequacy” as among those plan features. See 29 U.S.C.
§ 1185a(a)(7)(C)(ii). And ERISA has long recognized that a plan’s cost-sharing rules
are also a core feature of plan design. See, e.g., id. § 1185a(a)(3)(A) (prohibiting plans
from imposing “separate cost sharing requirements that are applicable only with
respect to mental health or substance use disorder benefits”).
Moreover, by affirmatively dictating the scope of a plan’s pharmacy network
and the cost-sharing requirements to which participants may be subject, these three
challenged provisions also interfere with “nationally uniform plan administration.”
Rutledge, 141 S. Ct. at 480. For example, due to the AWP and Retail-Only provisions, a
plan sponsor seeking to populate its pharmacy network exclusively with mail-order
pharmacies would be prohibited from doing so in Oklahoma. And a plan seeking to
encourage the use of mail-order pharmacies through lower copayments or cost-
sharing requirements would be constrained from doing that, too, in Oklahoma.
For those reasons, it is unsurprising that four other courts of appeals,
confronted with AWP laws similar to the Oklahoma provision challenged here, have
concluded that those provisions “relate to” ERISA plans for purposes of ERISA’s
preemption provision. 29 U.S.C. § 1144(a); see Kentucky Ass’n of Health Plans, Inc. v.
13
Nichols, 227 F.3d 352, 361-63 (6th Cir. 2000) (Kentucky AWP law preempted but
saved by insurance savings clause), aff’d, 538 U.S. 329 (2003); CIGNA Healthplan of
La., Inc. v. State of Louisiana, 82 F.3d 642 (5th Cir. 1996) (Louisiana AWP law
preempted and not saved); Prudential Ins. Co. of Am. v. National Park Med. Ctr., Inc., 154
F.3d 812 (8th Cir. 1998) (Arkansas AWP law preempted and not saved); Stuart Circle
Hosp. Corp. v. Aetna Health Mgmt., 995 F.2d 500 (4th Cir. 1993) (Virginia AWP law
preempted but saved).
b. The contrary arguments offered by the district court and Oklahoma lack
merit.
The district court reasoned that the challenged provisions lack a “ ‘connection
with’ ” ERISA plans because they do not “force[] ERISA plans to make any specific
choices.” Op. 4, Aplt.App. Vol. 3, at 737. Oklahoma similarly emphasizes that the
provisions do not dictate “specific choices” for plans. See Okla. Br. 27, 29. But neither
the Supreme Court nor this Court have ever held that state laws have a “connection
with” ERISA plans only if they foreclose plans from taking any approach save one.
Where, as here, a state law materially and directly forecloses central benefit-design
choices that would otherwise be available to a plan, the law has the relevant
“connection with” ERISA plans even if plans retain some residual flexibility. See, e.g.,
New York Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645,
668 (1995) (recognizing that a state law may be preempted where it “effectively
restricts [an ERISA plan’s] choice of insurers”); FMC Corp. v. Holliday, 498 U.S. 52, 60
14
(1990) (holding that a state law had a “connection with” ERISA plans because it
“prohibit[ed] plans from being structured in a manner requiring reimbursement in the
event of recovery from a third party”).
The district court and Oklahoma are likewise incorrect in asserting that the
AWP provision, Retail-Only Pharmacy Access Standards, and Cost-Sharing Discount
Prohibition just “alter the incentives” for ERISA plans in a manner comparable to the
laws upheld in Rutledge and Travelers. Op. 4, Aplt.App. Vol. 3, at 737; see Okla. Br. 26-
29. The Arkansas law at issue in Rutledge merely regulated the rates at which PBMs
must reimburse pharmacies. See Rutledge, 141 S. Ct. at 481 (explaining that Arkansas’s
law “affects plans only insofar as PBMs may pass along higher pharmacy rates to
plans with which they contract”). And the law in Travelers imposed hospital surcharges
on treatments provided to patients covered by certain insurers, and thus “simply
b[ore] on the costs of benefits and the relative costs of competing insurance to provide
them.” Travelers, 514 U.S. at 660 (emphases added). In short, both laws affected the
costs paid by plans, not plan structure or benefit design in the first instance. See
Rutledge, 141 S. Ct. at 481 (“Like the New York surcharge law in Travelers, Act 900 is
merely a form of cost regulation.”). In contrast, the AWP provision, Retail-Only
Pharmacy Access Standards, and Cost-Sharing Discount Prohibition are specifically
directed to core aspects of plan structure and benefit design. See supra pp. 12-14.
Finally, Oklahoma incorrectly argues that the Act does not implicate ERISA
because it directly regulates only PBMs, not ERISA plans. Okla. Br. 21-24. To start,
15
that argument appears to be at odds with the plain text of the Act itself. The Act
defines “pharmacy benefits manager” in functional terms as a “person that performs
pharmacy benefits management” and “any other person acting” for them. Okla. Stat.
tit. 36, § 6960(4). Thus, if an ERISA plan sought to construct its own pharmacy
network without relying on a third-party PBM, it appears that the Act would be
directly applicable to the plan’s conduct. But even if the Act were construed to
regulate only third-party PBMs, that would not eliminate the “connection with”
ERISA plans discussed above. The Act applies to a PBM to the extent that the PBM
is managing prescription drug benefits for a health insurer or self-funded plan (among
other entities). See id. § 6961. And “[b]ecause PBMs manage benefits on behalf of
plans, a regulation of PBMs ‘function[s] as a regulation of an ERISA plan itself,’”
Wehbi, 18 F.4th at 966 (quoting PCMA v. District of Columbia, 613 F.3d 179, 188 (D.C.
Cir. 2010)), at least to the extent the regulation governs a central matter of plan
administration.2 For that reason, the Eighth Circuit recently rejected an argument that
2
Whether ERISA plans are the direct object of a state law may be relevant to
whether the law makes impermissible “reference to” ERISA plans, as that analysis
focuses on whether the law “acts immediately and exclusively upon ERISA plans.” See
California Div. of Labor Standards Enf’t v. Dillingham Const., N.A., Inc., 519 U.S. 316, 325
(1997). But it is not dispositive to the analysis of whether a law has a “connection
with” ERISA plans, as that analysis focuses on “the nature of the effect of the state law
on ERISA plans.” Id. (emphasis added). A regulation directed toward PBMs may have
the requisite “connection with” ERISA plans if, as here, its effect is to significantly
constrain core choices about plan structure and benefit design.
16
state-law provisions automatically “escape preemption to the extent that they regulate
PBMs rather than plans.” Id. at 966-67. This Court should do the same.
2. The Any Willing Provider Provision, Retail-Only

Prohibition Are Saved from Preemption Except as
Applied Directly to ERISA Plans
While the AWP provision, Retail-Only Pharmacy Access Standards, and Cost-
Sharing Discount Prohibition “relate to” ERISA plans within the meaning of
ERISA’s express preemption provision, their application to third-party PBMs escapes
preemption because of ERISA’s insurance savings clause, 29 U.S.C. § 1144(b)(2)(A).
Under the so-called “deemer clause,” id. § 1144(b)(2)(B), however, the provisions
remain preempted to the extent that they apply to ERISA plans that directly engage in
covered conduct.3
a. A state law “regulates insurance,” 29 U.S.C. § 1144(b)(2)(A), and is therefore
saved from preemption under ERISA’s insurance savings clause, if it (1) is
“specifically directed toward entities engaged in insurance,” and (2) “substantially
affects the risk pooling arrangement between the insurer and the insured.” Kentucky
Ass’n of Health Plans v. Miller, 538 U.S. 329, 342 (2003). The AWP, Retail-Only, and
Cost-Sharing provisions satisfy both parts of that test.
3
The parties dispute whether Oklahoma adequately preserved an argument that
the savings clause applies. See PCMA Br. 39 n.14; Okla. Br. 35 n.7. The United States
takes no position on that question, and provides its views on the savings clause and
deemer clause because they are necessary to comprehensively address the issues raised
in this Court’s order inviting the filing of this brief.
17
Those three provisions are not merely “laws of general application that” only
incidentally “have some bearing on insurers.” Miller, 538 U.S. at 334. As Oklahoma
points out, “the Act is codified in Title 36, which houses state insurance laws, and is
executed by the State Insurance Department.” Okla. Br. 35 n.7. And as discussed, the
AWP, Retail-Only, and Cost-Sharing provisions address core features of insurance
coverage—namely, network composition and cost-sharing rules. See supra pp. 12-14.
That is sufficient to establish that the provisions are “‘specifically directed toward’ the
insurance industry” and therefore satisfy the first prong of Miller’s test. Miller, 538 U.S.
at 334 (citation omitted). Indeed, Miller itself found that the insurance savings clause
covered similar Kentucky AWP provisions. Id. at 331-32.
It makes no difference that the provisions here may be enforced against third-
party PBMs, not just insurers themselves. The AWP provisions in Miller likewise
applied to some “[health maintenance organizations (HMOs)] that do not act as
insurers but instead provide only administrative services to self-insured [ERISA
health] plans.” 538 U.S. at 336 n.1. The Supreme Court determined that the fact that
“these noninsuring HMOs [are] administering self-insured plans . . . suffices to bring
them within the activity of insurance” for purposes of the insurance savings clause. Id.
So too here: When a third-party PBM structures a pharmacy network or designs a
cost-sharing benefit for its insurer client, it is sufficiently engaged in the “activity of
insurance” to come within the insurance savings clause’s scope. Id. Moreover, the Act
explicitly makes insurers “responsible for monitoring all activities carried out by, or on
18
behalf of, the health insurer under the [Act].” Okla. Stat. tit. 36, § 6963(A), (B). This
further supports the conclusion that the Oklahoma laws aim to regulate “insurance
practices” and the entities that carry out those practices, whether they are insurance
companies in the traditional sense or PBMs.
The second part of the Miller test requires that a state law “substantially affect
the risk pooling arrangement between the insurer and the insured.” 538 U.S. at 342.
The Supreme Court held that Kentucky’s AWP laws in Miller satisfied this test
because, “[b]y expanding the number of providers from whom an insured may receive
health services, AWP laws alter the scope of permissible bargains between insurers
and insureds in a manner similar to . . . mandated benefit laws.” Id. at 338-39.
Oklahoma’s AWP law is no different from Kentucky’s AWP laws, save for the fact
that the regulated networks are pharmacy providers as opposed to medical providers.
The Court’s holding in Miller that AWP laws in general substantially affect risk
pooling arrangements thus applies with equal force to the Oklahoma AWP provision.
The Court’s logic in Miller also supports the conclusion that the two remaining
provisions affect risk-pooling arrangements. The Retail-Only provision regulates
network composition in a similar fashion to the AWP provision by increasing the
number of retail pharmacies that must be included in a pharmacy network, thereby
“expanding the number of providers from whom an insured may receive” services.
538 U.S. at 338. The Cost-Sharing provision also “alter[s] the scope of permissible
bargains between insurers and insureds,” id. at 338-39, by prohibiting insurers and
19
PBMs from offering more favorable cost-sharing terms (e.g., lower copays) to insureds
in exchange for filling their prescriptions at certain pharmacies (e.g., mail-order
pharmacies instead of retail pharmacies). To the extent that Oklahoma insureds may
prefer arrangements with lower cost-sharing for prescriptions filled through mail-
order pharmacies as opposed to retail pharmacies, Oklahoma prohibits that trade off.
Cf. id. at 339 (“No longer may Kentucky insureds seek insurance from a closed
network of health-care providers in exchange for a lower premium.”).
b. Even if a law regulating insurance is saved from preemption, there is a
“specified exception to the saving clause . . . found in § 514(b)(2)(B), the so-called
‘deemer clause.’ ” Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 733 (1985).
The deemer clause provides that an employee benefit plan shall not be “deemed” to
be in the business of insurance for purposes of a state law purporting to regulate
insurance companies and insurance contracts. 29 U.S.C. § 1144(b)(2)(B). In practical
effect, the clause means that state insurance laws are not saved to the extent they “are
applied directly to benefit plans.” Metropolitan Life, 471 U.S. at 741; see Fuller v. Norton,
86 F.3d 1016, 1024 (10th Cir. 1996) (“[T]he deemer clause . . . insures that states will
not treat ERISA plans as ‘persons’ subject to state laws enumerated in the savings
clause.”). In FMC Corp. v. Holliday, for example, the Supreme Court explained that
where an ERISA plan contracts for an insurance policy with a third-party insurer, the
insurer is not “relieved from state insurance regulation” by the deemer clause, and the
plan is consequently “subject to indirect state insurance regulation.” 498 U.S. at 61.
20
But if the plan opts to “self-fund” rather than obtaining an insurance policy through a
third party, the deemer clause exempts the plan’s own conduct “from state [insurance]
regulation insofar as that regulation ‘relates to’ the plans.” Id.
Applying that framework here, the AWP, Retail-Only, and Cost-Sharing
provisions are saved from preemption, and are thus enforceable, as applied to PBMs
and other third-party entities with which ERISA plans contract.4 But to the extent an
ERISA plan itself were to engage directly in conduct covered by the Act—such as by
denying preferred pharmacy status to a willing provider or providing cost sharing
discounts to individuals when they receive prescription drugs from certain in-network
4
To the extent that the Eighth Circuit suggested a broader application of the
deemer clause in Prudential Insurance Co. of America v. National Park Medical Center, Inc.,
413 F.3d 897 (8th Cir. 2005), its analysis is incorrect. There, the Eighth Circuit
invoked the deemer clause in concluding that ERISA preempted indirect regulation of
self-funded plans through the regulation of the insurance companies with which they
contract for access to provider networks. See id. at 912-13. As explained, however,
FMC Corp. indicates that the deemer clause does not foreclose States from applying
their insurance laws to third parties with which plans contract, even where that results
in indirect regulation of ERISA plans. See 498 U.S. at 61. In concluding otherwise, the
Eighth Circuit characterized the Supreme Court’s subsequent decision in Rush
Prudential HMO, Inc., v. Moran, 536 U.S. 355 (2002), as extending the deemer clause to
laws that are “indirectly applied to self-funded plans.” Prudential Ins., 413 F.3d at 912-13
(emphasis added) (citing Rush Prudential, 536 U.S. at 371-72 n.6). But the “indirectly”
modifier does not appear in the Supreme Court’s decision—the Eighth Circuit added
it on its own, without explanation, even though the statement in Rush Prudential is best
read (particularly in light of its citation to FMC Corp.) as being limited to instances in
which the insurance law is “applied to self-funded plans” directly. Rush Prudential, 536
U.S. at 372 n.6.
21
pharmacies—the deemer clause would shield the plan from direct state regulation, and
enforcement of the provisions against the plan would be preempted.5
II. The Medicare Statute Expressly Preempts the Oklahoma Law’s

Any Willing Provider Provision as Applied to Part D Plans
Separately, the Medicare statute preempts the Act’s AWP provision as applied
directly or indirectly to Medicare Part D plans because that provision is inconsistent
with CMS-issued standards.
A. The Medicare statute and its implementing regulations establish standards
that govern pharmacy networks for Part D plans. The statute provides that “[a]
prescription drug plan shall permit the participation” in its pharmacy network “of any
pharmacy that meets the terms and conditions under the plan.” 42 U.S.C. § 1395w-
104(b)(1)(A). CMS’s implementing regulations, in turn, establish an “any willing
pharmacy” requirement. That requirement mandates that a plan include in its standard
network any pharmacy that is willing to meet the plan’s standard terms and
conditions. See 42 C.F.R. § 423.505(b)(18); id. § 423.120(a)(8).
In issuing those implementing regulations, CMS considered but expressly
declined to require plans to allow any willing pharmacy to participate in their networks
as a “preferred” pharmacy. See 70 Fed. Reg. at 4254. CMS recognized that several
commenters supported such a requirement. See id. CMS nevertheless rejected the
5
Determining when a plan’s own conduct directly implicates the Act would
involve fact-specific questions that the present appeal provides no occasion for the
Court to resolve.
22
proposal, citing a need to account for a separate statutory provision that authorizes
Part D plans “to reduce cost-sharing differentially for network pharmacies.” Id.; see 42
U.S.C. § 1395w-104(b)(1)(B). This differential cost-sharing allowance results in
“preferred” pharmacies offering prescription drugs to Part D enrollees at lower levels
of cost-sharing than non-preferred pharmacies. See 42 C.F.R. § 423.120(a)(9) (“A Part
D sponsor offering a Part D plan that provides coverage other than defined standard
coverage may reduce copayments or coinsurance for covered Part D drugs obtained
through a preferred pharmacy relative to the copayments or coinsurance applicable
for such drugs when obtained through a non-preferred pharmacy.”); id. § 423.100
(defining “preferred pharmacy” as “a network pharmacy that offers covered Part D
drugs at negotiated prices to Part D enrollees at lower levels of cost-sharing than
apply at a non-preferred pharmacy”). CMS concluded that its any willing pharmacy
requirement―which mandates pharmacy access to standard, but not preferred,
networks―“strikes an appropriate balance between the need for broad pharmacy
access and the need for Part D plans to have appropriate contracting tools to lower
costs.” 70 Fed. Reg. at 4254.
Oklahoma’s AWP provision is inconsistent with those CMS-issued standards
and the deliberate decision CMS made to require access only to standard networks
because it requires PBMs to permit any willing pharmacy to participate in a drug
plan’s “preferred” network. The state-law requirement is thus preempted under the
terms of the Medicare Part D express preemption provision, which provides that
23
federal standards “shall supersede any State law or regulation (other than State
licensing laws or State laws relating to plan solvency) with respect to” prescription
drug plans offered by Part D plan sponsors. 42 U.S.C. § 1395w-26(b)(3); see id.
§ 1395w-112(g); cf. Crosby v. National Foreign Trade Council, 530 U.S. 363, 380 (2000)
(finding conflict between state law and federal statute because the statute was “drawn
not only to bar what [it] prohibit[s] but to allow what [it] permit[s]”); Geier v. American
Honda Motor Co., 529 U.S. 861, 881 (2000) (finding preempted a state law that “would
have stood ‘as an obstacle to the accomplishment and execution of ’ the important
means-related federal objectives” reflected in federal regulations addressing an
overlapping issue).6
B. The district court acknowledged that “Part D has an any willing provider
standard in relation to a plan’s standard network.” Op. 7, Aplt.App. Vol. 3, at 740.
The court nonetheless concluded that Oklahoma’s AWP provision is not preempted
because it “relates to the preferred network rather than the standard network.” Id.
That reasoning overlooks the fact that CMS, in implementing the Part D
statute, considered and rejected proposals to extend its any willing pharmacy
requirement to include access to “preferred” networks. CMS subsequently confirmed
6
Because Oklahoma’s AWP provision is inconsistent with a CMS-issued
standard, it is unnecessary to decide whether the provision is preempted under a
broader preemption theory, and we do not address that question here. See Do Sung
Uhm v. Humana, Inc., 620 F.3d 1134, 1150 (9th Cir. 2010) (declining to address
“precise degree to which the 2003 [Medicare] amendment[s] expanded the preemption
provision” because the state law at issue was “inconsistent” with federal standards).
24
that it would need to engage in additional analysis before extending this federal
requirement to preferred networks. See Medicare Program; Contract Year 2015 Policy
and Technical Changes to the Medicare Advantage and the Medicare Prescription
Drug Benefit Programs, 79 Fed. Reg. 29,844, 29,886-88 (May 23, 2014). Oklahoma’s
AWP provision thus interferes with CMS’s policy choice not to require access to
preferred networks, notwithstanding Congress’s explicit instruction that federal
standards “shall supersede” inconsistent state laws. 42 U.S.C. § 1395w-26(b)(3); see id.
§ 1395w-112(g).
In addition to defending the district court’s reasoning, Oklahoma argues that
the state-law AWP provision should not be preempted because it regulates only
PBMs, which are intermediaries and not themselves Part D plan sponsors. See Okla.
Br. 47-48. Federal law makes clear, however, that PBMs stand in the shoes of Part D
sponsors and create pharmacy networks to provide drugs to enrollees in those
sponsors’ prescription drug plans. See Wehbi, 18 F.4th at 966 (explaining that
regulation of PBMs functions as regulation of plans “[b]ecause PBMs manage benefits
on behalf of plans”). Indeed, CMS’s regulations specify that the Part D sponsor
“maintains ultimate responsibility for . . . complying with all terms and conditions of
its contract with CMS,” regardless of that sponsor’s relationships with other entities.
42 C.F.R. § 423.505(i).
Moreover, the Part D preemption provision does not require a state law to
directly regulate Part D plan sponsors in order to be preempted. Instead, it provides

25
that “standards established under [Part D] shall supersede any State” standards “with
respect to” prescription drug plans “which are offered by [Part D sponsors] under this
part.” 42 U.S.C. § 1395w-26(b)(3); see id. § 1395w-112(g); see also Do Sung Uhm v.
Humana, Inc., 620 F.3d 1134, 1157-58 (9th Cir. 2010) (explaining that the Part D
preemption provision’s “ language about [plan] sponsors modifies or describes what a
[prescription drug plan] is—it does not shift the locus of preemption from the
prescription drug plan to the sponsor”). The Act’s AWP provision establishes a rule
governing the pharmacy networks that PBMs can establish for the prescription drug
plans offered by Part D sponsors. Because that rule is inconsistent with CMS-issued
standards, it is preempted.
26
CONCLUSION
For the foregoing reasons, the judgment of the district court should be
affirmed in part and reversed in part.
Respectfully submitted,
SEEMA NANDA BRIAN M. BOYNTON

Solicitor of Labor Principal Deputy Assistant Attorney
WAYNE R. BERRY General
Acting Associate Solicitor for Plan Benefits BENJAMIN W. SNYDER
Security Assistant to the Solicitor General
JEFF HAHN ALISA B. KLEIN
GARRETT TRAUB s/ Anna O. Mohan
ISIDRO MARISCAL ANNA O. MOHAN
Attorneys Attorneys, Appellate Staff
Office of the Solicitor Civil Division, Room 7533
Plan Benefits Security Division U.S. Department of Justice
U.S. Department of Labor 950 Pennsylvania Avenue NW
200 Constitution Ave., N.W. Washington, DC 20530
Washington, D.C. 20210 (202) 514-3159
(202) 961-5182 [email protected]]
April 2023
27
CERTIFICATE OF COMPLIANCE
This brief complies with the type-volume limit of Federal Rules of Appellate
Procedure 29(a)(5) and 32(a)(7)(B) because it contains 6,492 words. This brief also
complies with the typeface and type-style requirements of Federal Rule of Appellate
Procedure 32(a)(5)-(6) because it was prepared using Word for Microsoft 365 in
Garamond 14-point font, a proportionally spaced typeface.
s/ Anna O. Mohan
Anna O. Mohan
CERTIFICATE OF SERVICE
I hereby certify that on April 10, 2023, I electronically filed the foregoing brief
with the Clerk of the Court for the United States Court of Appeals for the Tenth
Circuit by using the appellate CM/ECF system.
s/ Anna O. Mohan
Anna O. Mohan
Pharmaceutical Care v. Mulready, et al, Docket No. 22-06074 (10th Cir. May 04, 2022), Court Docket
General Information
Case Name Pharmaceutical Care v. Mulready, et al
Court U.S. Court of Appeals for the Tenth Circuit
Date Filed Wed May 04 00:00:00 EDT 2022
Federal Nature of Suit Constitutionality of State Statutes [3950]
Docket Number 22-06074
Status Closed
Parties STATE OF ARIZONA; STATE OF HAWAII; THE OKLAHOMA

EMPLOYERS HEALTHCARE ALLIANCE, INC.; AMERICAN BENEFITS
COUNCIL; UNITED STATES OF AMERICA; STATE OF MARYLAND;
STATE OF TEXAS; AMERICAN PHARMACIES, INC.; STATE OF
ILLINOIS; STATE OF KENTUCKY; DISTRICT OF COLUMBIA; STATE
OF NORTH CAROLINA; STATE OF CALIFORNIA; NATIONAL
ASSOCIATION OF CHAIN DRUG STORES, INC.; STATE OF
WASHINGTON; STATE OF MICHIGAN; STATE OF COLORADO;
STATE OF SOUTH CAROLINA; STATE OF RHODE ISLAND; STATE
OF CONNECTICUT; STATE OF MINNESOTA; STATE OF FLORIDA;
STATE OF ARKANSAS; THE STATE CHAMBER RESEARCH
FOUNDATION LEGAL CENTER, INC.; SELF-INSURANCE INSTITUTE
OF AMERICA, INC.; STATE OF MAINE; HEALTH CARE COST
MANAGEMENT CORPORATION OF ALASKA, DBA Pacific Health
Coalition; STATE OF IDAHO; STATE OF NEW MEXICO; OKLAHOMA
PHARMACISTS ASSOCIATION; ASSOCIATION OF FEDERAL
HEALTH ORGANIZATIONS; STATE OF NEVADA; STATE OF
MASSACHUSETTS; STATE OF MISSISSIPPI; STATE OF NEBRASKA;
© 2024 Bloomberg Industry Group, Inc. All Rights Reserved. Terms of Service
// PAGE 37
Pharmaceutical Care v. Mulready, et al, Docket No. 22-06074 (10th Cir. May 04, 2022), Court Docket
STATE OF NEW YORK; THE NATIONAL COMMUNITY OF

PHARMACISTS ASSOCIATION; OKLAHOMA INSURANCE
DEPARTMENT; STATE OF DELAWARE; STATE OF NEW JERSEY;
STATE OF INDIANA; NATIONAL LABOR ALLIANCE OF HEALTH
CARE COALITIONS; STATE OF SOUTH DAKOTA; STATE OF
OREGON; PHARMACEUTICAL CARE MANAGEMENT ASSOCIATION;
STATE OF KANSAS; STATE OF UTAH; STATE OF VIRGINIA; THE
ERISA INDUSTRY COMMITTEE; AMERICAN PHARMACISTS
ASSOCIATION; GLEN MULREADY, in his official capacity as Insurance
Commissioner of Oklahoma; STATE OF NORTH DAKOTA
© 2024 Bloomberg Industry Group, Inc. All Rights Reserved. Terms of Service
// PAGE 38

Pharmaceutical Care V Mulready, Et Al, Docket No 22-06074 (10th

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Appellate Case: 22-6074 Document: 010110841003 Date Filed: 04/10/2023 Page: 1

IN THE UNITED STATES COURT OF APPEALS

PHARMACEUTICAL CARE MANAGEMENT ASSOCIATION,

GLEN MULREADY, in his official capacity as

On Appeal from the United States District Court

BRIEF FOR AMICUS CURIAE THE UNITED STATES

SEEMA NANDA BRIAN M. BOYNTON

INTEREST OF THE UNITED STATES ..........................................................................1

STATEMENT OF THE CASE .............................................................................................1

B. Medicare Part D ................................................................................................. 4

C. Provisions of Oklahoma Law at Issue on Appeal ........................................ 7

D. Prior Proceedings ............................................................................................... 8

I. ERISA Does Not Preempt the Probation-Based Pharmacy Limitation

A. ERISA Does Not Preempt the Probation-Based Pharmacy

B. ERISA Preempts the Any Willing Provider Provision, Retail-Only

1. The Any Willing Provider Provision, Retail-Only Pharmacy

2. The Any Willing Provider Provision, Retail-Only Pharmacy

Employee Retirement Income Security Act of 1974 (ERISA):

Patient’s Right to Pharmacy Choice Act:

42 C.F.R. § 423.100 .......................................................................................................... 5, 23

U.S. Gov’t Accountability Office, GAO-19-498, Medicare Part D:

AWP Any Willing Provider

INTEREST OF THE UNITED STATES

invitation to set forth its views as to whether provisions of Oklahoma’s Patient’s

the Probation-Based Pharmacy Limitation provision in any respect. ERISA does

application of those provisions to third-party pharmacy benefit managers (PBMs).

indirectly to Medicare Part D plans because that provision is inconsistent with

pharmacy networks for Part D plans.

STATEMENT OF THE CASE

in Section 1003(a) includes one that is “established or maintained” by an “employer”

that is “engaged in commerce or in any industry or activity affecting commerce.” Id.

§ 1003(a). In particular, it includes an “employee welfare benefit plan” established or

maintained by an employer for the purpose of providing “medical” benefits “through

the purchase of insurance or otherwise.” Id. § 1002(1). Sponsors of ERISA-governed

benefits, including by providing a network of pharmacies at which plan participants

Fee Disclosure (2014), https://perma.cc/5T7A-SATY.

In construing ERISA’s express preemption provision, the Supreme Court has

stretch of its indeterminacy,” because such an interpretation would preempt

has an impermissible “connection with” ERISA plans if it “governs a central matter

of plan administration,” thereby “interfer[ing] with nationally uniform plan

Const., N.A., Inc., 519 U.S. 316, 325 (1997).

However, ERISA’s preemption provision contains a savings clause, 29 U.S.C.

Mut. Life Ins. Co. v. Harris, 510 U.S. 87, 99 (1993).

business of insurance’ to be saved from preemption; it need only be a ‘law . . . which

insured.” Id. at 342.

an insurance company . . . or to be engaged in the business of insurance . . . for

purposes of any law of any State purporting to regulate insurance companies.” 29

ERISA plans directly.

beneficiaries. See 42 U.S.C. § 1395w-112.

Part D plan sponsors frequently contract with PBMs to manage pharmacy

benefits on their behalf, including by negotiating contracts with pharmacies and

constructing pharmacy networks. U.S. Gov’t Accountability Office, GAO-19-498,

and Utilization 2 (2019), https://perma.cc/9Z99-RCSW (reporting that as of 2016,

“nonpreferred” pharmacies. See Medicare Program; Medicare Prescription Drug

levels of cost-sharing than non-preferred in-network pharmacies, meaning that

42 C.F.R. § 423.100 (defining network pharmacy, preferred pharmacy, and non-

CMS’s implementing regulations impose an “any willing pharmacy” requirement,

pharmacy”); id. § 423.120(a)(8) (providing that, in “establishing its contracted

pharmacy network,” a Part D sponsor offering qualified prescription drug coverage

and conditions”). In establishing that requirement, CMS considered but expressly

networks as a “preferred” pharmacy. See 70 Fed. Reg. at 4254.

The 2003 Medicare amendments also modified a pre-existing preemption

provision contained in Part C (governing Medicare benefits for services provided