New Arkansas law could force all CVS pharmacies to close by 2026
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All 23 CVS Pharmacy locations in Arkansas are at risk of closing following the passage of an obscure new state law. The legislation, known as Act 624, was signed into law last month by Governor Sarah Huckabee Sanders (pictured). It bans Pharmacy Benefit Managers (PBMs) from owning or operating pharmacies starting in 2026.
It would make Arkansas the first state to prohibit vertical integration between PBMs and pharmacies - a business model used by CVS Health through its subsidiary, CVS Caremark. Supporters say the law addresses longstanding concerns about market competition and transparency in the pharmaceutical supply chain.
Governor Sanders called the measure necessary to curb what she described as 'abusive' PBM practices. 'These massive corporations are attacking our state because we will be the first in the country to hold them accountable for their anticompetitive actions,' Sanders said in an April press release. PBMs act as intermediaries between drug manufacturers, insurers and pharmacies, negotiating prices and determining reimbursement rates.
Critics argue that PBMs who also own pharmacies can steer patients to their own outlets while under-reimbursing independent competitors. John Vinson, CEO of the Arkansas Pharmacists Association, said the law aims to restore fairness in the marketplace. 'The Arkansas Pharmacists Association is supportive of Act 624,' Vinson said. 'Act 624 is pro-business and pro-fair competition as it will support a market to remove conflicts of interest and stop price setters from also being price takers in a way that raises drug prices while also squeezing out market competitors.'
CVS Health warns the law could have serious consequences for patients and health plans across the state. A company spokesperson told Newsweek the legislation will increase drug costs and disrupt care for over 340,000 CVS pharmacy patients in Arkansas. 'All of our 23 Arkansas stores are currently open and will continue to operate for the immediate future. We're doing everything we can to continue to provide pharmacy services to our 340,000+ Arkansas pharmacy patients,' the spokesperson said Tuesday.
CVS also disputes claims that PBMs harm independent pharmacies, noting that there are currently 14 more independent pharmacies in Arkansas than in 2019. The company also argued that its PBM reimburses independent pharmacies at a higher rate than CVS locations in 61 percent of cases.
'Facts should matter more than rhetoric, and a simple economic analysis could have avoided all this chaos,' the spokesperson added. 'Small businesses, employers, health plans and others are going to have to pay more for prescription drugs starting next year because of this new law. Proponents of the bill have consistently made misleading claims about the need and rationale for this legislation, while downplaying the devastating impact it will have on patient care.'
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