From Congressional bills to FTC investigations, some efforts have been made to combat pharmacy welfare managers recently.
But Arkansas has always been a kind of clear action.
In April, Republican Gov. Sarah Huckabee Sanders signed legislation that stated that starting January 1, 2026, no PBM can own and operate a pharmacy in the state. In the announcement, the governor’s office said PBMs have increasingly purchased pharmacies in recent years, which has enabled them to raise the price of drugs and leave competitors unemployed.
The law may be designed to check The three largest PBMs – CVS Caremark, Express Scripts and Optum RX have processed 80% of all prescriptions in the U.S., but it is no surprise that some PBMs are fighting back. Last week, CVS Caremark and Express Scripts filed separate lawsuits challenging the law that was unconstitutional and would force pharmacies to close, cancel hundreds of jobs and actually increase costs.
“With Bill 624 signed into law, the Arkansas legislature and governor forced 23 community pharmacies to close by January 1, 2026, including a handful of people who opened 24 hours a day; shooting 500 local health care workers; eroding relying on Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkans of Arkansas Arkans Arkans Arkans Arkans Arkans Arkans Arkans Arkan Thibault, executive director of COMLUCATIONS, was in an email.
Express Scripts responded to these comments.
“If the law goes into effect in January, thousands of Arkansasians will scramble to navigate forced closures in pharmacies and find new ways to get their medicines and critical clinical support,” Susan Peppers, vice president of pharmacy practice at Evernorth Health Services, said in a statement.
A Sanders spokesman said the prosecution decision was just worried that they would lose market share.
“Governor Sanders is proud that Arkansas is the first state in the U.S. to be responsible for PBMS,” Sanders Communications Director Sam Dubke told Medcity News in an email. “These large drug middlemen only attacked Arkansas in court because they fear other states would fight with Governor Sanders for patient access and affordable prescriptions.”
litigation
CVS Health and Express Script all argued in a separate lawsuit against Bill 624 that the new law was designed to protect in-state pharmacies businesses, which they believed would charge higher prices while penalizing out-of-state competitors.
“The text, context and legislative history of Act 624 show that the purpose and effect of the statute is to protect local pharmacies living in Arkansas from out-of-state competition and do so by punishing specific out-of-state competitors,” according to Express Scrapps’ complaint.
The company notes that the purpose of Act 624 is to eliminate certain anti-competitive business strategies. However, explicit scripts believe that these strategies have been banned in current Arkansas laws. It illustrates a statute that prohibits PBMS from reimbursing pharmacists or pharmacists in the state is less than reimbursement from branches with the same service.
CVS pointed out the same thing in the complaint, adding that it actually reimburses non-affiliated pharmacies at a higher rate than its own pharmacies.
Additionally, CVS argued that the law unfairly exempted Walmart, one of Arkansas’ largest employers, which the law said “effectively operates PBM-affiliated pharmacies.” The complaint said the original draft of the bill would apply to Wal-Mart, but as a result, it was “almost dead” in the committee. The complaint noted that one senator said he could not vote for the original bill because it would prevent Walmart from owning a pharmacy. But the bill’s “architectural engineers designed a fix,” the CVS alleges.
“Although the legislature’s presumptive concern about PBM acting as Fox[es] When guarding the chicken coop, when they serve as “price setters and price contactors”, HB 1150 was modified to include exemptions for PBM affiliated pharmacies if the PBM serves only the pharmacy’s own employee benefits program. So while Walmart can continue to operate its pharmacies, one of its largest out-of-state competitors (CVS) will be forced to leave Arkansas altogether. ”
It is important to note that Walmart is not a PBM. However, according to CVS, the company provides PBM services. A CVS spokesperson pointed out this Medcity News Reporter article that announced that the buyer health conglomerate of employers’ alliances, including Walmart, has set up a company called Emsanarx in 2021, which provides PBM services to employers.
CVS noted in the complaint that Walmart announced plans to expand its pharmacy products in Arkansas, and that prescription orders have increased since the law.
CVS and Express Script believe that the law violates the Constitution in many ways. But, according to a healthcare law expert, their most powerful case is about dormant business clauses, which say states cannot pass laws that unfairly harm or discriminate against businesses in other states. Both CVS and Express scripts have the same proposition. Besides that, Jesse C. Dresser, a partner in the Department of Life Sciences in Frier Levitt, said they also have different arguments about the way the law is unconstitutional.
Furthermore, even if the law is reasonable, it can harm out-of-state PBM affiliate pharmacies in favor of Arkansas, which can be seen as discriminatory, he said.
“It’s all this and I don’t think the PBMS lawsuit will succeed,” the dresser added. “There are broad powers for the pharmacies that regulate the power of ordinary police, and recent cases have shown that dormant business clauses do not prohibit all state regulations that affect interstate trade.”
What will happen next?
Like Arkansas, several other states are considering similar efforts, including Vermont and New York. The results of these lawsuits in Arkansas may prompt them to take action.
“Probably, once we see how these cases can get out of the situation with quick scripts and resumes, these other states may pick up the mantle and try to do something similar.”
According to Dresser, the main reason why Arkansas is the first state to pass the law may be that some of its PBM-affiliated pharmacies have smaller concentrations than some other states, meaning it won’t be closed like other states.
He added that he was surprised when CVS said it needed to close only 23 pharmacies and hoped the company would have a bigger business.
For Express Scripts, the company does not operate physical pharmacies in Arkansas, but does have 25 non-resident pharmacies licenses in Arkansas, with its legal implications. The company will not be able to provide care by filling prescriptions or by obtaining home care through Evernorth Pharmacy, a subsidiary of Cigna.
Several advocacy groups have emerged to support Arkansas law. This includes the National Association of Community Pharmacists, which says the legislation is groundbreaking because it can address vertical integration itself rather than creating laws to address its downstream impact.
“HB 1150 removes many bad actors with huge conflicts of interest, participants who have not yet complied (or have not yet found a way to work) have previously enacted laws,” said Joel Kurzman, director of state government affairs at the National Association of Community Pharmacists. “The legislation sets the competitive environment as a more competitive pharmacy environment and ultimately becomes more patient-friendly.”
The NCPA gave an example of the Tennessee Bureau of Commerce and Insurance audit, finding that the script reimbursed its own or affiliated pharmacy at a higher tax rate than a script signed by a non-owned or affiliated PBM.
Now, patients with affordable medications are now responding to the question of vertical integration.
“Vertical integration allows PBM to control which drugs are covered and where prescriptions are filled – turning patients to their own pharmacies, favoring higher-priced drugs to increase their profits and squeeze out many patients, especially in rural areas, independent pharmacies that rely on many patients,” Merith Basey, the patient’s executive director, now offers affordable drugs for affordable drugs.
There are also efforts at the federal level to prohibit PBM from owning pharmacies, such as patients before the Monopoly Act. This is a bipartisan bill introduced in December by Senators Elizabeth Warren and Josh Hawley. However, the dresser found that this was unlikely to be the first major PBM reform at the federal level. Instead, there may be legislation that requires a higher level of transparency from PBM in the first place.
Photo: Bong Hyunjung, Getty Images
