Arkansas has become the first state to ban pharmacy benefit managers from owning or operating pharmacies, thanks to a new law signed by Governor Sarah Huckabee Sanders on Wednesday. This move is part of a broader push in various states to impose regulations on pharmacy benefit managers, entities that manage prescription drug plans for major clients, including insurers and employers. Advocates of the law argue that these middlemen have forced many independent pharmacies, particularly those in rural areas, to shut down.
“For far too long, drug middlemen called PBMs have taken advantage of lax regulations to abuse customers, inflate drug prices, and cut off access to critical medications. Not anymore,” stated Sanders in an announcement from her office. The decision has met with resistance from CVS Health, which has aired TV ads against the bill, claiming the legislation could result in the closure of 23 pharmacies in Arkansas and disrupt service for thousands of consumers. CVS expressed a willingness to discuss medication affordability and accessibility with policymakers in Arkansas and beyond, but criticized the bill as bad policy.
The company argues that the new law will reduce local access to pharmacy care, increase prescription costs statewide, and result in job losses for hundreds. Meanwhile, 39 state attorneys general have called for Congress to introduce similar legislation, stating that such measures would promote fairness, choice, and transparency for consumers.
Despite the support, some lawmakers have voiced concerns about the legislation being anticompetitive. Republican Senator Missy Irvin questioned whether the government is overstepping by eliminating competition through legislation. Arkansas is not alone in taking action; Alabama Governor Kay Ivey recently approved a law mandating that pharmacy benefit managers reimburse independent pharmacists at least the state Medicaid rate for medications. Over recent years, many independent pharmacies in Alabama have closed, often finding the reimbursement from PBMs insufficient compared to drug dispensing costs.
The Alabama Independent Pharmacy Alliance hailed the new law as a significant achievement, while acknowledging ongoing challenges. It stated, “SB252 is only the first step in dismantling the corrupt behemoth that is responsible for the increased cost of healthcare in Alabama, all at the expense of pharmacies, employers and patients.” The alliance emphasized their continued collaboration with legislators to realize this objective.