Gov. Sarah Sanders signed a bill Wednesday afternoon that could reshape the pharmacy business landscape in Arkansas, despite an aggressive lobbying campaign by CVS Health — one of the largest companies in the country — urging her to veto the measure.
House Bill 1150 targets pharmacy benefit managers, or PBMs — middlemen companies that handle drug claims and negotiate rates on behalf of insurers. PBMs help determine how much pharmacies get paid for filling prescriptions. The nation’s three largest PBMs are owned by huge health care conglomerates that also run their own in-house pharmacies, including CVS. Together, they process 60-80% of all pharmacy claims in the U.S.
Arkansas’s independent pharmacies say it’s inherently unfair and uncompetitive for a PBM to also run a pharmacy. The bill, which was pushed by the Arkansas Pharmacists Association, will ban PBMs from holding pharmacy licenses in the state beginning in January. The ban will include online pharmacies that handle mail-order prescriptions.
CVS has said its two dozen locations in Arkansas would likely close if the bill became law.
The advertising blitz mustered by the company over the past week didn’t sway the governor, who issued a statement Wednesday slamming PBMs. She framed the bill as “conservative,” despite the fact it directly intervenes in the private market.
“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. “These massive corporations are attacking our state because we will be the first in the country to hold them accountable for their anticompetitive actions, but Arkansas has never been afraid to be a conservative leader for America.”
After Sanders signed the bill Wednesday, CVS Health issued a statement saying the new law will hurt the state.
“CVS Health welcomes a good faith discussion with policy makers in Arkansas and across the country on ways to make medicine more affordable and accessible,” a spokeswoman said. “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.”
John Vinson, head of the pharmacists association, said it will do just the opposite. “HB1150 will dramatically improve local access, lower prescription drug prices, and reduce delays in care for patients,” he said.
“The PBM fox will no longer guard the henhouse,” Vinson added.
Here’s the full statement from Sanders’ office, which includes praise for the bill from small pharmacists around the state.
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