OptumRx, the pharmacy services arm of UnitedHealth Group, jumped into fresh litigation targeting Iowa’s pharmacy benefit manager law.
The move came after a separate lawsuit already froze several provisions, leaving the rest of the law awkwardly alive and causing, as plaintiffs put it, a planning nightmare.
Iowa approved the PBM statute in June. It bans PBMs from tinkering with cost sharing based on a consumer’s chosen pharmacy, forces pass through pricing into every PBM and third party payer contract, and demands that all rebates flow straight to health carriers or plan sponsors. Straightforward on paper, messy in execution.
A month later, the U.S. District Court for the Southern District of Iowa hit pause on chunks of the law tied to mail order operations, cost sharing, referral rules, and disclosure demands. The judge said these parts would likely get preempted by ERISA or fall afoul of the First Amendment. Big swing.
Iowa Insurance Commissioner Doug Ommen appealed that injunction. The other side cross appealed. Both filings sit in the Eighth Circuit, and maybe they’ll sit a while.
The hitch, according to OptumRx, is that the July order only shields the original parties. Nonparties remain exposed to enforcement, and the court never barred them from launching their own challenges. So here we are.
Ommen didn’t help the mood. In September he issued a bulletin saying the department intended to enforce the PBM law.
Then in October he sent a letter stating he was obligated to enforce every part of it against companies not tied to the earlier case. That split treatment rattled the market.
The new complaint argues this inconsistency makes drafting plans and policies almost impossible, and honestly you can see why.
One set of firms gets cover, everyone else gets the full weight of the statute. That’s a rough setup for anyone trying to run a nationwide benefits operation.
OptumRx and its co plaintiffs now want the court to stretch the injunction across additional parties and eventually wipe out the law entirely. They said they would’ve preferred not to file, but Ommen’s recent statements left no room to gamble.
Money damages won’t fix the operational whiplash, plaintiffs say. Only an expanded injunction gives meaningful relief, and they’re pushing hard to get it.
