Arkansas takes on Big Pharma: CVS faces shutdown after state's ban on pharmacy benefit managers

By avagrace // 2025-06-01

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Arkansas Gov. Sarah Huckabee Sanders signed a law (HB 1150) prohibiting Pharmacy Benefit Managers (PBMs) from owning pharmacies, aiming to curb conflicts of interest and lower drug prices. The law takes effect in 2026.
CVS, which owns PBM Caremark Rx, claims the law will force it to close all 23 Arkansas locations unless it sells its pharmacies or drops PBM operations in the state.
CVS argues the law will harm patient access, while Arkansas officials and independent pharmacies accuse PBMs of anti-competitive practices, such as underpaying independents while favoring their own stores.
Arkansas joins states like Oklahoma and Tennessee in targeting PBMs, with bipartisan support for greater transparency. The FTC is also investigating PBM pricing tactics, as three major PBMs control 80 percent of U.S. prescription claims.
If CVS leaves, 340,000 Arkansans may need new pharmacies. Supporters believe independents can fill the gap, and the law could inspire broader reforms to reduce drug costs nationwide.

Pharmacy giant CVS may soon shutter all 23 of its Arkansas locations after Gov. Sarah Huckabee Sanders signed a first-of-its-kind law cracking down on Pharmacy Benefit Managers (PBMs), the secretive middlemen accused of inflating drug prices. The new legislation, set to take effect in 2026, bans PBMs from owning pharmacies, a move CVS claims will force it out of the state. Supporters argue the law protects patients and independent pharmacies from corporate exploitation. PBMs act as negotiators between drug manufacturers, insurers and pharmacies, determining, which medications are covered and at what price. But critics say these companies operate with little transparency, often pocketing hidden fees while driving up costs for patients. (Related: LAWSUIT: CVS Pharmacies accused of hiking up drug prices for those with insurance.) Arkansas' new law, HB 1150, directly targets this conflict of interest by prohibiting PBMs from owning pharmacies. The logic is simple: A company should not control both the pricing and the distribution of drugs, as it creates an unfair advantage over independent pharmacies while squeezing consumers. CVS, which owns the PBM Caremark Rx, now faces a dilemma. To comply with the law, it must either sell its Arkansas pharmacies or relinquish its PBM operations in the state. The company insists the law will harm patients, particularly those relying on 24-hour pharmacies. But Arkansas officials aren't backing down. Sanders and Arkansas Attorney General Tim Griffin argue that PBMs have long manipulated the system, favoring their own pharmacies while underpaying independents.

A national movement against PBMs: Independent pharmacies fight back

For years, small-town pharmacies have struggled against PBM dominance. Many say they are forced to accept lowball reimbursement rates or excluded from insurance networks altogether. The Arkansas Pharmacists Association, which backed the law, argues that separating PBMs from pharmacy ownership will restore fairness. John Vinson, CEO of the association, suggests CVS could keep its stores open by surrendering its PBM license. But the company has yet to commit, with CVS warning of "devastating" consequences. It claims the new law will raise drug prices and limit access. Arkansas isn't alone in its fight. States like Oklahoma, Tennessee and North Carolina have passed similar reforms, and bipartisan bills in Congress seek greater PBM transparency. Even the Federal Trade Commission has launched investigations into PBM pricing tactics. The stakes are high: Just three PBMs – CVS Caremark, Cigna's Express Scripts and UnitedHealth's OptumRx – control nearly 80 percent of prescription claims nationwide. Their influence over drug prices has drawn scrutiny from both Republicans and Democrats, making PBM reform one of the rare issues with cross-party support. If CVS follows through on its threat to leave, over 340,000 Arkansans will need to find new pharmacies. The company insists the law will backfire, but supporters counter that independents can fill the gap – especially now that they won’t be undercut by PBM-owned chains. But Sanders remains defiant, framing the law as a victory for free-market competition. "Arkansas has never been afraid to be a conservative leader for America," she declared. Whether other states follow suit could determine the future of prescription drug pricing nationwide. The Natural State's bold move against PBMs marks a turning point in the battle over drug affordability. While CVS warns of disruption, proponents believe breaking up the PBM-pharmacy monopoly will ultimately lower costs and protect patients. Watch this video about Rep. Ro Khanna (D-CA) pushing legislation to enshrine President Donald Trump's order to lower drug prices. This video is from the Cynthia's Pursuit of Truth channel on Brighteon.com.

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A national movement against PBMs: Independent pharmacies fight back

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