The State Capitol building, in Little Rock, Arkansas. Credit: W. Scott McGill/Shutterstock
Express Scripts and CVS Pharmacy — two of the three biggest U.S. pharmacy benefit managers — are suing to block an Arkansas law that forbids PBMs from owning pharmacies.
The PBMs say the law is a form of economic protectionism that violates the U.S. Constitution by using curbs on out-of-state companies to help companies in Arkansas.
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The law would hurt the U.S. Defense Department's Tricare employee health benefits program, and it could eliminate about 600 jobs by causing more than 40 PBM-affiliated pharmacies to close, according to a complaint Express Scripts filed Thursday in the U.S. District Court for the Eastern District of Arkansas, in Little Rock, Arkansas.
CVS Pharmacy said in a complaint filed Thursday in the same court that the law could force it to close Arkansas CVS pharmacies that employ about 500 people.
Express Scripts wants the court to enjoin the new Arkansas law from taking effect and to declare the law to be unlawful.
Related: Arkansas law bans PBM ownership of pharmacies
Express Scripts is now part of Cigna's Evernorth Health Services unit.
CVS Pharmacy is the parent of Caremark and a subsidiary of CVS Health.
The backdrop: Pharmacies have been trying to persuade state legislatures and Congress to curb PBMs, arguing that the big PBMs are using their huge size and ability to own their own pharmacies to drive independent pharmacies out of business and capture savings that were supposed to go to employer plan sponsors, patients and other payers.
Arkansas Gov. Sarah Huckabee Sanders signed the bill banning PBM ownership of Arkansas pharmacies into law April 16.
Many employer health plan sponsors have supported the pharmacies' fight against PBMs. Others, including the Arkansas State Chamber of Commerce, have sided with the PBMs.
Pharmacy groups outside of Arkansas are watching its PBM pharmacy ownership law closely to see how their states can curb PBMs.
The PBMs' views: Express Scripts said the new Arkansas law would kill pharmacies affiliated with Express Scripts that have been providing mail-order pharmacy services for Arkansas residents for decades.
In addition to causing dozens of PBM-affiliated pharmacies to close, the law "will also dangerously limit patient choice and deny access to lifesaving drugs at affordable prices," the company said. "And it will create mass confusion among Arkansans about where and how they can receive needed prescription medications."
Express Scripts argued that the restrictions on its operations in Arkansas could hurt its ability to administer pharmacy benefits for Tricare enrollees.
Express Scripts noted that Arkansas's own state government has recognized the value of PBMs by hiring a PBM to manage to its own prescription drug benefits.
Arkansas' view: Sam Dubke, Sanders' communications director, said in a statement that Sanders is "proud that Arkansas is the first state in the nation to hold PBMs accountable for their anticompetitive practices."
"These big drug middlemen are only attacking Arkansas in the courts because they're worried other states will join Governor Sanders in fighting for patient access and affordable prescriptions," Dubke said.
Suit details: The full list of plaintiffs in the Express Scripts complaint includes seven Express Script affiliates: Express Scripts Pharmacy, ESI Mail Pharmacy Service, Express Scripts Specialty Distribution Services, Accredo Health Group, Lynnfield Drug, Lynnfield Compounding Center and Village Fertility Pharmacy.
The CVS Pharmacy complaint lists a long list of affiliates as plaintiffs.
In both complaints, the list of defendants includes John Kirtley, who is the executive director of the Arkansas State Board of Pharmacy, along with the board's board members.
CVS Pharmacy has also named the board itself as a plaintiff.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
