Arkansas

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Seyfarth Synopsis: As expected, the lawsuits have commenced following the enactment of the Arkansas legislation prohibiting pharmacy benefit managers (PBM’s) from owning or operating actual pharmacies within the state. Michigan has filed its own lawsuit against PBMs. Further, a similar bill targeting PBMs is winding its way through the Illinois legislature.

Arkansas Law

As we discussed in our blog post here, Arkansas recently became the first state in the nation to prohibit licenses for retail, mail order or specialty pharmacies that are owned (directly or indirectly) by a PBM. The law does contain a limited exception that allows the issuance of licenses to PBM-affiliated pharmacies for certain rare, orphan, or limited distribution drugs, but this window for exceptions closes in September 2027 (presumably intended to provide a transition period to source these drugs through pharmacies not affiliated with PBMs). 

PBM Reaction

Two lawsuits have now been filed by PBMs challenging Arkansas’ authority to pass this legislation. The lawsuits allege harm to residents of Arkansas by causing the closure of many brick and mortar pharmacies across the state and the inability to access mail-order pharmacies. Express Scripts, in its suit, argues that the Arkansas state law violates several provisions of the United States Constitution, claiming that:

  • the intended purpose of the state statute — to protect local pharmacies — violates the Commerce Clause.
  • the protectionist purpose of burdening out-of-state citizens violates the Privileges and Immunities Clause
  • the singling out of PBMs and their affiliated pharmacies for punishment violates the Attainder Clause, which bars legislative punishment (including banishment) of specific groups.

Because Express Scripts and its affiliates provide services to the US Defense Department’s TRICARE program, the suit also claims that the state statute is preempted by the federal law and regulations surrounding that program.

Arkansas has not yet filed its response to the suits.Continue Reading States Seeking Remedies for the Rising Costs of Prescription Drugs