Court Ruled Kentucky PBM Lawsuit Stays Federal
The 6th U.S. Circuit Court of Appeals moved Kentucky's lawsuit against pharmacy benefit managers into federal court.
Updated on Sept. 28, 2026 in Healthcare
On September 8, 2026, the 6th U.S. Circuit Court of Appeals ruled that Kentucky's lawsuit against pharmacy benefit managers (PBMs) belongs in federal court. This decision reversed a prior district court ruling that had sent the case back to state court.
Why it matters
The court determined that states cannot avoid federal jurisdiction by framing claims as purely commercial activities when the conduct involves administering federally-contracted health benefit programs. This ensures that PBMs acting under federal officers can utilize federal legal defenses.
The ruling relied on 28 USC 1442, the federal statute governing case removal, and the precedent established in Ohio ex rel. Yost v. Ascent Health Services, LLC (165 F.4th 999). The decision also references the foundational legal test for federal contractor immunity outlined in 487 U.S. 500.
The players
6th U.S. Circuit Court of Appeals
This federal court serves as an intermediate appellate body for district courts located in Kentucky, Michigan, Ohio, and Tennessee.
Office of Personnel Management
This independent agency manages the civil service of the United States federal government and oversees health benefit programs for federal employees.
The details
Kentucky originally sued two pharmacy benefit managers in state court over their alleged opioid distribution practices. The 6th Circuit found that because the PBMs administered health benefits for federal employees under Office of Personnel Management contracts, their challenged conduct was inextricably linked to federal duties.
Timeline
September 8, 2026: The 6th U.S. Circuit Court of Appeals issued its decision.
Market Landscape
This ruling reinforces a trend where federal courts consolidate litigation involving pharmacy benefit managers that interact with federal health programs. It positions federal jurisdiction as a primary venue for these disputes, potentially limiting the scope of state-level oversight.
The transition to federal court may impact the pace and strategy of the litigation regarding opioid distribution claims. Residents should expect the case to move through federal rather than state court proceedings moving forward.
The takeaway
This decision underscores the difficulty states face when attempting to challenge PBM activities that intersect with federal benefit contracts. It emphasizes that federal oversight often supersedes state jurisdiction in complex health-program litigation.
Further reading
For more on the legal and regulatory environment for medical services, visit the Kentucky Healthcare section.
