What's Happening?
The Pharmaceutical Care Management Association (PCMA) has filed a lawsuit against the state of California, challenging a new law that imposes fiduciary duties on pharmacy benefit managers (PBMs). The law, known as SB 41, was enacted in October 2025 and
requires PBMs to act in the best interests of their clients, disclosing all commissions and conflicts of interest. This legislation applies to self-insured employer plans, which are regulated under the federal Employee Retirement Income Security Act (ERISA). PCMA argues that the law intrudes on federally regulated health insurance plans and is preempted by ERISA. The lawsuit, filed in the US District Court for the Central District of California, claims that the law transforms PBMs from nonfiduciary administrators into fiduciaries, which could lead to costly changes in business practices and increased litigation risks.
Why It's Important?
This legal challenge highlights the ongoing tension between state and federal regulations concerning healthcare and insurance practices. The outcome of this case could have significant implications for the healthcare industry, particularly in how PBMs operate and are regulated. If California's law is upheld, it could set a precedent for other states to impose similar regulations, potentially leading to a more uniform standard of fiduciary responsibility across the country. This could benefit consumers by ensuring that PBMs act in their best interests, potentially lowering drug costs. However, it could also increase operational costs for PBMs, which might be passed on to consumers or employers. The case also underscores the broader national debate over drug pricing and the role of PBMs in the healthcare system.
What's Next?
The case, Pharmaceutical Care Management Association v. Bonta, will proceed in the US District Court for the Central District of California. The court's decision could prompt further legal challenges or legislative actions, depending on the outcome. If the court rules in favor of California, other states may be encouraged to enact similar laws, potentially leading to a patchwork of state regulations. Conversely, if the court sides with PCMA, it could reinforce the preeminence of federal regulations under ERISA, limiting states' ability to impose additional fiduciary duties on PBMs. Stakeholders, including employers, healthcare providers, and consumer advocacy groups, will likely monitor the case closely, as its outcome could influence future policy decisions and business practices in the healthcare sector.
