Arkansas has become the first state to ban pharmacy benefit managers from owning pharmacies after Gov. Sarah Huckabee Sanders signed House Bill 1150 into law April 16.
The legislation, sponsored by state Rep. Jeremiah Moore and state Sen. Kim Hammer, prohibits state pharmacy permits from being issued to PBMs beginning Jan. 1, according to an April 16 press release from the governor’s office.
“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,” Ms. 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.”
PBMs such as CVS Caremark, Optum Rx and Express Scripts control 80% of the U.S. prescription market and bring in 70% of specialty drug revenue.
The National Community Pharmacists Association praised the new law, calling it a groundbreaking move that tackles the problem with the conflict of interest in PBMs owning pharmacies.
“Time and time again, PBMs have proven themselves to be resistant to transparency and reform,” said Anne Cassity, NCPA senior vice president of government affairs. “H.B. 1150 is a structural change that gets to the heart of the problem—the conflicts of interest inherent in vertical integration that PBMs have been manipulating to the detriment of patients, taxpayers, and pharmacies. We applaud H.B. 1150 and are eager to see its provisions implemented in Arkansas and, ideally, throughout the country,” she said.
CVS Health and Optum Rx, however, have criticized the legislation, warning of serious health consequences for patients and the healthcare industry in Arkansas.
“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,” CVS stated. “Unfortunately, HB1150 is a 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.”
Patrick Conway, MD, CEO of Optum Rx, raised concerns with investors April 17 about the patient impact of the legislation.
“We’re honestly not sure what problem they are trying to solve, but let me be clear on the impact on patients,” he said. “We have Genoa pharmacies in the state providing integrated mental and behavioral health care. This could cut off access for those patients with things like schizophrenia and severe depression. You have specialty medicine where we may be serving a patient with cancer for years, and imagine that patient now not getting their medication in their home.”