Arkansas legislature passes bill to ban 'monopoly' PBMs from owning pharmacies in state
- IPMD
- Apr 10
- 3 min read
Arkansas is leading the charge in regulating PBMs, which the Federal Trade Commission said in a 2024 report are inflating drug costs and squeezing local pharmacies that aren't affiliated with them
Reporter: Andrew Mobley
Arkansas lawmakers in the Senate on Wednesday passed a bill that would stop pharmacy benefit managers (PBMs) from owning pharmacies and selling drugs retail in the state. The bill now heads to the governor's desk for her signature.
PBMs are the middlemen who negotiate with insurance companies, manufacturers, and pharmacies to set drug prices. Where the controversy comes in is when PBMs also own their own pharmacies, creating what many believe is a conflict of interest.
Arkansas is leading the charge in regulating PBMs, which the Federal Trade Commission said in a 2024 report are inflating drug costs and squeezing local pharmacies that aren't affiliated with them.
Federal and state officials and pharmacists alike have criticized the practices of healthcare companies like CVS, which owns their own insurance company, Aetna, their own pharmacies, as well as pharmacy benefit manager, CVS Caremark.
PBMs serve pharmacies, including those outside their ownership, by setting reimbursement rates for drugs sold through health insurance plans. Pharmacists have accused PBMs of using their market power to set reimbursement rates to levels below independent pharmacies' costs while at the same time paying their own affiliated pharmacies many times more than actual drug acquisition costs.
"When you have that conflict of interest, where the fox is guarding the hen house, then you can abuse that power as a monopoly to raise prescription drug prices and limit access for patients," said John Vinson, CEO of the Arkansas Pharmacists Association.
CVS has been accused of limiting access to drugs by steering patients with insurance plans using CVS Caremark to their own mail-order pharmacies.
"One day I was standing at the pharmacy counter and they said you can no longer fill here, your insurance isn't going to cover it," said Loretta Boesing, founder of Unite for Safe Medications.
Boesing says that news was distressing—her son Wesley nearly died the last time her family had gotten drugs through a CVS mail-order pharmacy, which shipped the medication improperly. Medication Wesley needs daily so his body doesn’t reject the transplanted liver he got at the age of two.
"It was a 102-degree day here in Missouri, one of the hottest on record and they delivered the medication. I got the package, and I felt how hot it was, and I just knew that something didn't feel right. But I thought, surely, they wouldn't do this if it wasn't safe. It was a liquid oral transplant medication," Boesing said. "Wesley at the time was a toddler. So, I gave it to him and then he ended up in the hospital and he was fighting for his life again."
Boesing says when CVS shipped the drugs improperly again after forcing her to use one of their mail-order pharmacies, she dropped them.
More from KATV: New Arkansas rule curbs unfair practices by pharmacy benefit managers, protect pharmacies
Boesing came to Arkansas to testify in support of HB 1150, which would force companies like CVS to choose between operating as a PBM or owning pharmacies in Arkansas to eliminate the potential for predatory and exclusionary practices.
If CVS chooses to continue operating as a PBM in Arkansas, it will have to close its pharmacies here... CONTINUE READING
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