The Sixth Circuit Court of Appeals has ruled that the Commonwealth of Kentucky's lawsuit against several pharmacy benefit managers (PBMs) can proceed in federal court. The court's decision, issued on September 18, 2026, allows Kentucky to pursue claims that the PBMs contributed to the state's opioid crisis. This ruling affects the PBMs involved, including Express Scripts, Inc., and OptumRx, Inc., and has implications for similar lawsuits across the country.
The case arose from Kentucky's allegations that the PBMs conspired with drug manufacturers to increase the supply of prescription opioids. The Commonwealth claims that these companies violated state consumer protection laws and created a public nuisance by promoting opioids over safer alternatives. The outcome of this case could set a precedent for how similar lawsuits are handled in the future.
Background
The parties involved in this case include the Commonwealth of Kentucky, represented by Attorney General Russell Coleman, and several PBMs, including Express Scripts and Optum. Kentucky filed the lawsuit in state court, asserting that the PBMs played a significant role in the opioid epidemic by negotiating with drug manufacturers for preferred placement of opioids on formularies in exchange for rebates and fees.
The PBMs removed the case to federal court, citing the federal officer removal statute, which allows for such actions when a defendant is acting under a federal officer. Kentucky then moved to remand the case back to state court, arguing that its claims did not involve conduct under federal jurisdiction. The district court agreed and sent the case back to state court.
The Ruling
The Sixth Circuit Court of Appeals reversed the district court's decision, allowing the case to remain in federal court. Chief Judge Jeffrey S. Sutton, along with Judges Julia Smith Gibbons and Stephanie Dawkins Davis, concluded that the PBMs acted under federal officers in their roles as intermediaries between drug manufacturers and federal health plans.
The court ruled, "Because Kentucky seeks to impose liability based on indivisible federal conduct, the Commonwealth’s disclaimer does not alter our removal analysis. The PBMs properly removed the case under § 1442."
The court emphasized that the PBMs' actions were closely tied to their federal duties, which included negotiating drug coverage for federal employees and administering benefits for military personnel. The ruling highlighted the interconnectedness of the PBMs' federal and non-federal conduct, stating that the lawsuit's claims related directly to federally supervised acts.
Impact
This ruling has significant implications for the ongoing opioid crisis and how lawsuits against PBMs are handled. By allowing Kentucky's lawsuit to proceed in federal court, the court has set a precedent that could influence similar cases across the country. The decision may encourage other states to pursue legal action against PBMs and drug manufacturers, potentially leading to increased scrutiny of their practices.
The ruling also underscores the importance of the federal officer removal statute, which allows defendants to seek federal jurisdiction when their actions are connected to federal duties. This could lead to more cases being litigated in federal court, where the legal landscape may differ from that of state courts.
What's Next
Following this ruling, Kentucky's lawsuit will continue in federal court, where the Commonwealth can pursue its claims against the PBMs. It remains to be seen whether the PBMs will appeal this decision or if there are related cases pending in other jurisdictions that could influence the outcome of this case.