CVS Health Sues Arkansas Over PBM Pharmacy Ownership Ban

Arkansas has enacted Act 624, a law prohibiting pharmacy benefit managers (PBMs) from owning or operating pharmacies in the state starting in 2026, making Arkansas the first state to impose such a structural ban. The law targets vertical integration practices, particularly affecting CVS Health, which owns both PBMs and retail pharmacies, including 23 locations in Arkansas. CVS Health is suing to block the law, arguing it is unconstitutional under the Dormant Commerce Clause and Equal Protection rights, claiming it discriminates against out-of-state businesses and unfairly favors local pharmacies that often charge higher prices. Supporters, including Governor Sarah Huckabee Sanders and the Arkansas Pharmacists Association, contend the law addresses anti-competitive PBM practices that reduce patient choice and inflate drug prices by favoring PBM-owned pharmacies. The law includes a narrow exemption for pharmacies serving only their own employees to accommodate specific closed-loop arrangements. CVS warns the law could lead to store closures, job losses, and increased drug costs, while advocates say it will restore fairness and competition in the pharmaceutical market.