LITTLE ROCK, Ark. (AP) In a significant move that could reshape the healthcare landscape, Arkansas Governor Sarah Huckabee Sanders formally signed a groundbreaking piece of legislation on Wednesday, which prohibits pharmacy benefit managers (PBMs) from owning or operating pharmacies. This makes Arkansas the first state to implement such a restriction, signaling a potential shift in how prescription drug coverage is managed across the nation.

This legislative action comes amidst a growing national conversation where several states are considering similar restrictions aimed at pharmacy benefit managers. These entities primarily manage prescription drug coverage for major clients, including health insurers and large employers that provide health benefits to their employees. As the role of PBMs has grown, so too have concerns regarding their impact on local pharmacies, particularly in rural and underserved areas.

Supporters of the new law argue that pharmacy benefit managers have increasingly pressured independent pharmacies to the point of closure, particularly in rural communities where access to medication is already limited. Governor Sanders expressed her determination to protect consumers from what she described as drug middlemen who have exploited regulatory gaps. 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, Sanders stated in a public release from her office.

However, the legislation has not been universally welcomed. CVS Health, a major player in the pharmacy industry, has been actively campaigning against the bill through television advertisements and public statements urging the governor to veto the legislation. Company representatives warn that the new law could lead to the closure of 23 CVS pharmacy locations across Arkansas and severely disrupt services for thousands of customers who rely on these pharmacies for their medications.

In their statement, CVS Health criticized HB1150, claiming it would do the opposite of what its proponents intend. Unfortunately, HB1150 is bad policy that accomplishes just the opposite: it will take away access to pharmacy care in local communities, hike prescription drug spending across the state by millions of dollars each year, and cost hundreds of Arkansans their jobs, they declared, emphasizing their willingness to engage in discussions with policymakers to explore alternatives that would enhance the affordability and accessibility of medicine.

The conversation around PBMs has gained traction beyond Arkansas. This week, a coalition of thirty-nine attorneys general sent a letter to Congress urging the passage of federal legislation mirroring Arkansas law, asserting that it would promote fair competition, choice, and transparency for consumers across the country.

Yet, the Arkansas ban has not escaped criticism from certain lawmakers. During discussions surrounding the bill, Republican Senator Missy Irvin articulated her concerns, arguing that government intervention to eliminate competition is a troubling precedent. The government should not be put in the position of saying, Guess what, we dont like our competition and were going to use the government and the law to put our competition out of business, she stated during a Senate debate earlier this month.

Other states are also moving forward with measures aimed at regulating pharmacy benefit managers. For instance, in Alabama, Governor Kay Ivey recently enacted legislation that mandates PBMs to reimburse independent pharmacists at least at the state Medicaid rate for prescription drugs. This change comes on the heels of reports highlighting the closure of numerous independent pharmacies in Alabama over the past two years, a trend attributed to the financial strain PBMs place on local pharmacies.

The Alabama Independent Pharmacy Alliance welcomed the new law as a historic milestone but acknowledged that further efforts are necessary. 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 group stated. They emphasized their commitment to continue working with legislators to achieve long-term solutions that support local pharmacies and enhance patient care.

As the debate over pharmacy benefit managers unfolds, the ramifications of Arkansas law could potentially inspire similar legislative efforts in other states, reshaping the relationship between pharmacies, PBMs, and the communities they serve.