PBM lobby files lawsuit to block Arkansas law
Less than two weeks after two of the largest pharmacy benefit managers (PBMs) challenged the constitutionality of a state law in Arkansas that would make it illegal for such companies to own retail pharmacies, a lobby representing the industry has filed its own lawsuit.
The Pharmaceutical Care Management Association (PCMA), which represents the PBM middlemen of the prescription drug supply chain, is challenging the law, which would force companies to divest from operating drug stores if they distribute wholesale drugs and set prices.
PCMA is taking the stance that the regulation is bad for patients and overly broad, writing in the lawsuit that Act 264 is a “fundamentally flawed law that could shutter pharmacies, restrict access to critical medications for patients and families, increase healthcare costs and eliminate jobs.”
The group estimates 40 drugstores across the state would be forced to close their doors, leaving patients without access to necessary drugs and other services supplied by clinicians at those locations. The group named seniors, cancer patients, veterans and rural residents as would-be victims of the legislation, which has been signed by Gov. Sarah Huckabee Sanders and is set to take effect in 2026.
“Our lawsuit aims to protect patients in Arkansas from the implementation of this dangerous, misguided policy. If implemented, the Arkansas legislation mandating forced closures of pharmacies would have a devastating impact on patient access to critical medications and pharmacy services,” PCMA wrote in a statement about the lawsuit.
“Implementation of the law could eliminate convenient home delivery options for Arkansas patients, including seniors and veterans, severely jeopardize access to treatment for specialty pharmacy patients managing complex and serious conditions, like cancer, and close local retail pharmacies in the state, eliminating high-quality health care jobs and preventing patients from keeping their pharmacist,” it added.
State law echoes fears of FTC
The stated aim of Act 264 is to reduce anticompetitive business practices by PBMs, which can use their place in the drug supply chain to favor pharmacies they own, pushing smaller independent retailers out of business.
In writing the bill, lawmakers looked to a pending lawsuit against the three largest PBMs in the country—owned by CVS, Cigna and UnitedHealth/Optum—filed by the Federal Trade Commission (FTC), which contends the business model has allowed PBMs and drug manufacturers to artificially inflate the price of insulin.
While proponents of the law argue patients will benefit from increased competition in the market as PBMs are forced to sell off their pharmacies, PCMA takes the opposite position, warning that the act “would sharply reduce market competition in the prescription drug space by unlawfully discriminating against certain types of pharmacies. Patients, employers, and health plan sponsors could all experience increased costs as they lose access to these pharmacy options, which can deliver significant savings.”
In any case, Act 264 now faces legal challenges, with plaintiffs arguing the state is favoring local businesses unfairly, in violation of the Equal Protection Clause and Dormant Commerce Clause, federal laws that interpret the U.S. Constitution to mean states cannot stop companies from operating in the local market.
PCMA announced the filing of their lawsuit on June 9. Courts have yet to hear arguments in any of the pending litigation.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.