PBM’s Policy Update Fax Not TCPA “Advertisement,” Says Eastern District of Missouri

Earlier this week, the U.S. District Court for the Eastern District of Missouri granted summary judgment for a pharmacy benefit manager (PBM) that allegedly violated the TCPA by sending unsolicited advertisements via fax to thousands of healthcare providers. The defendant was entitled to judgment as a matter of law, the court concluded, because the fax simply notified recipients of changes to insured patients’ coverage and did not promote any products or services.

The case began when a St. Louis healthcare provider (BPP) filed a complaint alleging that defendant CaremarkPCS Health, LLC, violated the TCPA when it sent an unsolicited fax to over 55,000 providers notifying them of new limits on insurance coverage for opioid prescriptions for pediatric and adolescent patients in plans sponsored by Caremark’s clients. BPP v. CaremarkPCS Health, LLC, No. 4:20-cv-126, 2021 WL 5195785, at *1 (E.D. Mo. Nov. 9, 2021). Caremark, which manages prescription drug benefits for various health insurers, asked for summary judgment on the ground that the fax was not an “advertisement” under the TCPA and that plaintiff’s claim therefore failed as a matter of law. Id.

The court found with ease that Caremark’s fax was not an “advertisement” because it was not “commercial in nature” and was purely informational. Id. at *2. The court cited a Sixth Circuit case that held that a similar fax from a PBM to a healthcare provider wasn’t a TCPA “advertisement” because it merely informed providers of changes to a patient plan. Id. (citing Sandusky Wellness Ctr., LLC v. Medco Health Sols., Inc., 788 F.3d 218, 222 (6th Cir. 2015)). “[T]he fax does not advertise anything for sale, but rather, informs Plaintiff of Caremark’s new supply limit and how this may affect Plaintiff in its professional practice,” the court explained. Id. (citing St. Louis Heart Ctr., Inc. v. Caremark, LLC, No. 4:12-cv-2151, 2013 WL 9988795, at *3 (E.D. Mo. Apr. 19, 2013)).

The court rejected the plaintiff’s invitation to inquire whether Caremark might gain an economic benefit later on as a result of sending the fax. “The fact that the sender might gain an ancillary, remote, and hypothetical economic benefit later on does not convert a noncommercial, informational communication into a commercial solicitation.” Id. at *3 n.3 (quoting Sandusky, 788 F.3d at 225).

And, although the fax incidentally referred to services provided by Caremark, it was not commercial in nature because its “primary purpose” was to inform and not to promote. Id. at *2 (citing Sandusky, 788 F.3d at 222). The court emphasized that Caremark wasn’t even in the business of selling services to healthcare providers and that Caremark therefore couldn’t have hoped to solicit business by sending the fax. Id. at *3 (citing Sandusky, 788 F.3d at 222-23). The court compared Caremark’s fax to the one at issue in Sandusky, which was found not to be an advertisement despite incidentally mentioning defendant’s products. Id.

Concluding that Caremark’s faxes weren’t commercial in nature and therefore didn’t constitute an actionable TCPA “advertisement,” the court granted summary judgment to Caremark. Id.

The case affirms that courts are receptive to a straightforward analysis of whether a fax is an unlawful advertisement based on the clear intent of the message. Even if a fax incidentally mentions the sender’s business (which it inevitably will), the communication does not automatically become “commercial in nature,” and a court should instead focus on whether the fax actually solicits a transaction. We expect that other courts will, like Caremark, adopt Sandusky’s straightforward, commonsense application of the “commercial nature” test for a TCPA advertisement.