Credit: Allison Bell/ALM
The Arkansas Pharmacists Association and the National Community Pharmacists Association last week filed a legal brief defending a state law regulating pharmacy benefit managers. The brief, filed in the 8th Circuit Court of Appeals, supports a state law enacted this year that prohibits companies from simultaneously operating both a PBM and a pharmacy.
Express Scripts is suing to overturn Act 624, which made Arkansas the first state in the nation to prohibit PBMs from acquiring or holding a direct or indirect interest in a pharmacy. It is aimed at removing a potential conflict of interest that arises when PBMs that also operate pharmacies are incentivized to steer patients away from smaller competitors to their own pharmacies and to reimburse their own pharmacies at higher rates than their competitors receive.
“The law protects patients by simply saying a business can either be a licensed PBM or a licensed pharmacy -- but not both,” said John Vinson, CEO of the Arkansas Pharmacists Association. “PBMs are forcing our most vulnerable Arkansans -- including those battling cancer -- to use pharmacies owned by or affiliated with the PBMs, and in many cases forcing them to overpay with massive markups for the medications they depend on. This blatant conflict of interest leads to dangerous delays in treatment that threaten patients’ health and safety.”
Express Scripts’ complaint said the law “imperils the health” of the 50,000 Arkansans it serves, including members of the military, their families and veterans, because the PBM is the primary mail-order pharmacy provider for Tricare, the military’s health insurance program.
Act 624 allows the state pharmacy board to issue limited permits to PBMs if they provide “drugs that are otherwise unavailable in the market to a patient or a pharmacy that would otherwise be prohibited” under the law.
The national association, which represents nearly 19,000 independent pharmacies across the country, has been active in Arkansas and other states supporting and defending laws that protect patient access to the pharmacies of their choice.
“The Arkansas law is a model for the country,” CEO B. Douglas Hoey said. “Vertical integration has allowed a handful of giant corporations to control patients and create massive disadvantages for their competition. They deny patients the ability to choose their own health care providers, and they put a lot of small, independent pharmacies out of business, creating pharmacy deserts. The Arkansas law eliminates the obvious conflict of interest at the heart of the problem.”
The Arkansas Insurance Department received thousands of complaints in 2024, claiming PBMs either illegally paid below, at or just above the national average of what drugstores pay wholesalers for drugs, independent pharmacists and the department’s general counsel told state lawmakers, according to the Arkansas Advocate.
Arkansas Attorney General Tim Griffin said he will defend Act 624 from its challengers.
“PBMs leverage their affiliated pharmacies to manipulate prices, corrupt the market and destroy competition,” he said.
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