CVS threatens closure of 23 Arkansas pharmacies if new anti-monopoly law targeting pharmacy benefit managers remains in place.
Key Takeaways
- CVS and Express Scripts have filed lawsuits to block Arkansas’ first-in-the-nation law prohibiting pharmacy benefit managers (PBMs) from owning pharmacies
- The legislation, signed by Governor Sarah Huckabee Sanders, aims to protect independent rural pharmacies from being driven out of business by powerful PBMs
- CVS has threatened to close all 23 of its retail pharmacies in Arkansas if the law is enforced, claiming it represents an “assault on free commerce”
- Arkansas Attorney General Tim Griffin defends the law as necessary to curb the “outsized power” of PBMs that profit at consumers’ expense
Big Pharmacy Chains Fight Arkansas Regulations
A groundbreaking Arkansas law designed to protect independent pharmacies has triggered immediate legal challenges from pharmacy giants CVS and Express Scripts. The legislation, signed by Governor Sarah Huckabee Sanders, prohibits pharmacy benefit managers (PBMs) from owning or operating pharmacies within the state. This first-of-its-kind regulation in the United States has set off a major battle between corporate pharmacy chains and state officials who argue they’re defending small businesses and consumer interests against industry monopolization.
Express Scripts claims in court documents that the law will have “devastating consequences” for Arkansas residents. “And it will create mass confusion among Arkansans about where and how they can receive needed prescription medications, irreparably breaking bonds that patients have formed over many years with their pharmacists and pharmacy-provided home-visit nurses,” Express Scripts stated in their lawsuit against the state.
PBM reform is gaining ground. Arkansas just passed laws banning PBMs from owning pharmacies—a major step to end conflicts of interest. State attorneys general are also pressuring Congress to follow suit. It’s time for federal action. #PBMReform #JusticeForCole #StopTheMonopoly… pic.twitter.com/1KoCT22TyB
— Angry Dad (@angrydadwi) April 20, 2025
CVS Issues Closure Threats
CVS has dramatically raised the stakes in the legal battle by threatening to close all 23 of its retail pharmacies in Arkansas if the law goes into effect. The pharmacy chain argues that the regulation “represents an assault on free commerce between the states and the foundational principles of fair-market competition that underpin the Union,” according to their legal filing. This aggressive response demonstrates how seriously major pharmacy chains are taking this regulatory challenge to their integrated business model.
The potential closure of these pharmacies could significantly impact access to medications in certain communities, particularly in areas where CVS may be the primary or only pharmacy option. This highlights the complex balance between regulating business practices and ensuring continued access to essential healthcare services, especially in a state with many rural communities that already struggle with healthcare access issues.
Attorney General Defends Consumer Protections
Arkansas Attorney General Tim Griffin has come out strongly in defense of the new law, framing it as necessary protection against PBMs that “wield outsized power to reap massive profits at the expense of consumers,” Attorney General Tim Griffin stated in defense of the legislation.
The controversy highlights a growing movement across multiple states to regulate PBMs, which serve as middlemen between insurance companies and pharmacies but have grown increasingly powerful in the healthcare ecosystem. Arkansas joins a coalition of attorneys general advocating for similar regulations at the federal level, arguing that the vertical integration of PBMs with pharmacy chains creates conflicts of interest that harm consumers and independent pharmacies alike.
Rural Pharmacies in the Balance
At the heart of this legal battle is the survival of independent pharmacies, particularly those serving rural communities. Supporters of the Arkansas law argue that PBMs have been systematically forcing independent pharmacies to close through various business practices, including inequitable reimbursement rates and steering patients to their own affiliated pharmacies. These independent businesses often provide personalized care and serve as healthcare access points in communities that lack other medical facilities.
As the lawsuits progress through the courts, the outcome could set a precedent for other states considering similar regulations. The Arkansas case represents a fundamental question about the appropriate limits on corporate integration in healthcare and whether state governments have the authority to restrict certain business models in the interest of preserving competition and protecting consumers from potential monopolistic practices.
