Arkansas Passes Law Banning PBMs From Owning Pharmacies

The push among regulators and legislators to lower sky-high drug prices in America has recently focused on PBMs, companies that negotiate drug discounts with pharmaceutical manufacturers in return for favorable placement on plans’ formularies and pay pharmacies for dispensing medication.

In particular, legislators have targeted the “Big Three PBMs” operated by healthcare conglomerates CVS, UnitedHealth and Cigna, which jointly control 80% of the U.S. prescription drug market,

Despite momentum in Congress at the close of last year, PBM reform legislation failed to make it across the finish line, leaving a gap that states appear increasingly willing to step into. Arkansas’ legislation, for one, is meant to prevent a conflict of interest that comes when PBMs own pharmacies that was highlighted by the Federal Trade Commission in a pair of damaging reports on the PBM industry released late last year and early this year.

The FTC found the Big Three — CVS’ Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx — generally paid independent pharmacies lower rates than in-house pharmacies, directed business to their owned subsidiaries and pressured independent pharmacies to accept coercive and damaging fees.

“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, a Republican, said in a statement after signing the legislation, named HB1150.

However, HB1150 — which goes into effect Jan. 1, 2026 — will hurt patients, PBMs say.

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