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RUTLEDGE v. PHARMACEUTICAL CARE 
MANAGEMENT ASSN. 
Opinion of the Court 

a prescription, the pharmacy checks with a PBM to deter-
mine  that  person’s  coverage  and  copayment  information.  
After the beneficiary leaves with his or her prescription, the 
PBM reimburses the pharmacy for the prescription, less the 
amount  of  the  beneficiary’s  copayment.   The  prescription-
drug plan, in turn, reimburses the PBM. 
  The amount a PBM “reimburses” a pharmacy for a drug 
is not necessarily tied to how much the pharmacy paid to 
purchase that drug from a wholesaler.  Instead, PBMs’ con-
tracts  with  pharmacies  typically  set  reimbursement  rates 
according to a list specifying the maximum allowable cost 
(MAC) for each drug.  PBMs normally develop and admin-
ister  their  own  unique  MAC  lists.    Likewise,  the  amount 
that prescription-drug plans reimburse PBMs is a matter of 
contract between a given plan and a PBM.  A PBM’s reim-
bursement  from  a  plan  often  differs  from  and  exceeds  a 
PBM’s reimbursement to a pharmacy.  That difference gen-
erates a profit for PBMs. 
  In  2015,  Arkansas  adopted  Act  900  in  response  to  con-
cerns that the reimbursement rates set by PBMs were often 
too low to cover pharmacies’ costs, and that many pharma-
cies, particularly rural and independent ones, were at risk 
of  losing  money  and  closing.    2015  Ark.  Acts  no.  900.    In 
effect, Act 900 requires PBMs to reimburse Arkansas phar-
macies  at  a  price  equal  to  or  higher  than  that  which  the 
pharmacy paid to buy the drug from a wholesaler. 
  Act  900  accomplishes  this  result  through  three  key  en-
forcement  mechanisms.    First,  the  Act  requires  PBMs  to 
tether  reimbursement  rates  to  pharmacies’  acquisition 
costs by timely updating their MAC lists when drug whole-
sale  prices  increase.    Ark.  Code  Ann.  §17–92–507(c)(2) 
(Supp. 2019).  Second, PBMs must provide administrative 
appeal procedures for pharmacies to challenge MAC reim-
bursement  prices  that  are  below  the  pharmacies’  acquisi-
tion costs.  §17–92–507(c)(4)(A)(i)(b).  If a pharmacy could 
not have acquired the drug at a lower price from its typical