Arkansas’ Attempt to Rein in Drug Middlemen Meets Judicial Roadblock

Arkansas’s Act 624, a landmark law designed to limit the influence of pharmacy benefit managers (PBMs), has been put on hold by a federal court order. The law, signed earlier this year by Governor Sarah Huckabee Sanders and scheduled to take effect on August 5, was seen as a key measure to prevent PBMs from inflating drug prices and squeezing out independent pharmacies. Its fate now hinges on the outcome of ongoing legal battles.

A First-in-the-Nation Law

Act 624 was the first law of its kind in the United States. It sought to address problems later outlined in a 2024 Federal Trade Commission (FTC) report that accused major PBMs, including CVS and Express Scripts, of inflating prices and setting reimbursement rates to benefit their own pharmacies. The FTC has since filed lawsuits against three of the largest PBMs, alleging anticompetitive and unfair practices.

The Arkansas Pharmacists Association says the law’s goal is to dismantle monopolies and improve patient access to care. John Vinson, the association’s CEO, explained that when PBMs own pharmacies and steer patients to them at higher costs, treatment is delayed, care is disrupted, and challenges mount for those facing serious conditions such as cancer. He said the state introduced the law to make care simpler, more affordable, and more accessible for its sickest and most vulnerable residents.

Industry Pushback

The Arkansas Pharmacists Association joined the National Community Pharmacists Association in filing an amicus brief in support of the state’s case. Vinson emphasized that three pharmacy benefit managers control 84 percent of the national prescription market, with one company managing more than half of Arkansas’s commercial claims, which he described as clear evidence of monopoly power.

Despite the legal setback, Vinson remains optimistic. He called the case a “David and Goliath battle” but expressed confidence that Arkansas has a strong chance of success, whether before the Eighth Circuit, the Supreme Court, or again in the Eastern District after Judge Brian Miller completes a full review.

PBMs and their allies have fought back. CVS and Express Scripts sued to block Act 624, arguing that it would harm consumers if enforced. CVS warned it would be forced to close its 23 retail pharmacies in Arkansas and even ran television ads urging Governor Sanders to veto the law. After the court temporarily halted the measure, CVS said it welcomed the ruling and reaffirmed its commitment to Arkansas. In a statement, the company said it remains focused on serving Arkansans and is working with the state to reduce drug costs and maintain pharmacy access.

The Legal Arguments

CVS, Express Scripts, Optum Rx, and their trade group, the Pharmaceutical Care Management Association, filed separate lawsuits that were later consolidated. The PBMs argue that Act 624 violates the Commerce Clause of the U.S. Constitution, which prohibits states from discriminating against interstate commerce. They claim the law unfairly benefits in-state pharmacies while disadvantaged national providers.

In his ruling, Judge Brian Miller of the Eastern District of Arkansas found that Act 624 appears to discriminate against companies based outside the state. He also said Arkansas had not shown that there were no other ways to achieve its goals.

Attorney General Tim Griffin has announced plans to appeal the preliminary injunction, signaling that the legal fight over Act 624 is far from finished.