Illinois Capitol, seen from steps of Illinois Supreme Court, Springfield
SPRINGFIELD — A federal judge has shelved Illinois' new so-called Prescription Drug Affordability Act, finding the state law almost certainly conflicts with federal law by burdening organizations that help insurers manage prescription drug benefits with extensive additional reporting mandates that the judge said would unconstitutionally compete with federal rules.
On Aug. 31, U.S. District Judge Colleen Lawless entered an injunction, blocking Illinois state officials from enforcing the PDAA law, saying its reporting requirements are preempted by the federal Employee Retirement Income Security Act (ERISA.)
"The Court recognizes that Illinois has a strong interest in protecting consumers from predatory practices," Lawless wrote in her decision. "The increased cost of prescription drugs in recent years is a significant problem that Illinois and other states have sought to address."
But, citing ERISA, the judge said, "the State’s strong interest in enforcing its own laws must yield to Congress’s decision more than 50 years ago to expressly preempt 'any and all State laws as they may now or hereafter relate to any employee benefit plan.'”
Lawless was appointed to the U.S. District Court for the Central District of Illinois by former President Joe Biden.
The judge's order marks a significant win for the Pharmaceutical Care Management Association in its lawsuit challenging the PDAA law.
The PCMA is a trade group representing organizations known as pharmacy benefit managers (PBMs.) PBMs are companies that essentially act as middlemen, managing prescription drug benefits for health insurers, governments and large private employers.
The state's Democratic legislative supermajority passed the PDAA in 2025, claiming the measure would help reduce the price of prescription drugs.
In signing the measure into law, Gov. JB Pritzker said the state could use the law to address a "health care system infected by profit-seeking middlemen and predatory actors looking to make an extra dime at the expense of Illinois patients."
However, in filing its legal challenge, the PCMA asserted the Illinois law "actually threatens to make (prescription drug) prices even higher."
"Unless challenged, Illinois’ pharmacy network restrictions and stringent reporting requirements will lead to higher costs and burdens for these employers while raising cost-sharing and premiums for patients," said David Marin, president and CEO of the PCMA.
In the lawsuit filed in June, the PCMA asserted the PDAA law is preempted by the federal ERISA, which generally forbids states from interfering with employee healthcare benefit plans that are subject to federal regulation to prevent large employers from having to navigate what PCMA called a "patchwork of state-specific mandates."
In her decision, Judge Lawless largely agreed.
In blocking the law, Lawless particularly noted the PDAA's requirements forcing organizations the state may define as a PBM or other "predatory" middleman to file extensive reports to help the state's Department of Insurance identify "the availability of more affordable prescription drug alternatives and the true cost of prescription drugs" likely run afoul of the ERISA law's prohibition on such state-specific mandates.
The judge said "the PDAA’s extensive Reporting Requirements … constitute requirements that 'are central to, and an essential part of, the uniform system of plan administration contemplated by ERISA.'
"Therefore, Plaintiff is likely to succeed on the merits in establishing the PDAA’s Reporting Requirements are preempted by ERISA because the provisions regulate a central matter of plan administration and interfere with nationally uniform plan administration."
Following the ruling, the PCMA hailed the injunction, calling it "an important victory for employers, labor unions, and the millions of Illinoisans who receive health coverage through self-insured health plans."
In a statement issued by the PCMA, Marin said: "The court recognized a growing problem: states are increasingly attempting to meddle in prescription drug benefits protected by federal law. Illinois crossed a legal line. The new burdens imposed by the state would force employers to navigate an even more fragmented system and ultimately drive up drug costs for everyone at a time when affordability is a top concern.”
“There are proven ways to lower prescription drug costs for patients and employers. PBMs have been actively promoting those solutions. Adding new mandates and reporting burdens is not one of them.
