Arkansas bans pharmacy benefit managers from owning pharmacies in state

LITTLE ROCK, Ark. — Arkansas Gov. Sarah Huckabee Sanders signed legislation Wednesday prohibiting pharmacy benefit managers from owning or operating pharmacies, becoming the first state to enact such a restriction.

The measure comes as other states are considering restrictions on pharmacy benefit managers, which run prescription drug coverage for big clients that include health insurers and employers that provide coverage.

Supporters of the restrictions have said pharmacy benefit managers are forcing independent pharmacies, especially in rural areas, out of business.

''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 said in a statement released by her office.

CVS Health has been running TV ads in the state opposing the bill and urging Sanders to veto it. CVS officials have said the legislation would force the company to close 23 pharmacies in the state and would disrupt service for thousands of customers.

The company on Wednesday it welcomed a discussion with policymakers in Arkansas and other states on ways to make medicine more affordable and accessible.

''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,'' CVS Health said in statement.

Thirty-nine attorneys general urged Congress this week to pass legislation similar to Arkansas' law prohibiting pharmacy benefit managers from owning or operating pharmacies. In the letter, the attorneys general said such legislation "would foster fair competition and promote choice and transparency for the American people."

The Arkansas ban, however, has drawn criticism from some lawmakers who said it is anticompetitive.

''The government should not be put in the position of saying, ‘Guess what, we don't like our competition and we're going use the government and the law to put our competition out of business,' " Republican Sen. Missy Irvin during debate over the measure in the Senate this month.

Several other states have taken up other pharmacy benefit manager restrictions this year. In Alabama, Gov. Kay Ivey on Tuesday signed legislation that will require pharmacy benefit managers to reimburse independent pharmacists at least at the state Medicaid rate for prescription drugs.

Dozens of independent pharmacies, many in rural areas, have shuttered in Alabama over the last two years, according to the Alabama Independent Pharmacy Alliance. Pharmacists said that is because it can often cost more to dispense a drug than they are reimbursed by pharmacy benefit managers.

The alliance called the new Alabama law a historic milestone but added ''there is still work to be done.''

''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 said in a statement Tuesday. "AIPA will continue to work with legislators to accomplish this goal.''

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Chandler reported from Montgomery, Alabama