CVS Health threatens to close 23 Arkansas pharmacies as major corporations clash with state over landmark legislation designed to protect independent pharmacies from corporate middlemen.
Key Takeaways
- CVS and Express Scripts have filed a lawsuit challenging Arkansas’ first-in-nation law prohibiting pharmacy benefit managers from owning pharmacies
- Governor Sarah Huckabee Sanders signed the law to protect independent pharmacies, particularly in rural areas, from alleged predatory PBM practices
- CVS has threatened to close all 23 of its Arkansas retail pharmacies if the law is enforced
- Arkansas Attorney General Tim Griffin defends the law as necessary to challenge the “outsized power” of PBMs and protect consumers
- The battle represents a growing national movement among states to regulate pharmacy benefit managers
Corporate Giants Challenge Rural Pharmacy Protection Law
Two corporate pharmacy giants, CVS and Express Scripts, have launched a legal counteroffensive against a groundbreaking Arkansas law that would prevent pharmacy benefit managers (PBMs) from owning or operating pharmacies within the state. The law, recently signed by Governor Sarah Huckabee Sanders, represents the first legislation of its kind in the United States. The legal battle highlights the growing tension between large pharmacy chains and state governments concerned about the survival of independent pharmacies, particularly in underserved rural communities.
The legislation was specifically designed to address what many consider predatory practices by PBMs, which serve as middlemen between insurance companies and pharmacies. These middlemen negotiate drug prices, determine reimbursement rates for pharmacies, and decide which medications are covered by insurance plans. Critics argue that when these same entities also own competing pharmacies, they create an unfair marketplace that threatens the existence of independent pharmacies, which often serve as essential healthcare access points in rural communities.
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
Corporate Threats and Claims of “Devastating Consequences”
In response to the legislation, CVS has made a dramatic threat, claiming it may be forced to close all 23 of its retail pharmacy locations throughout Arkansas if the law is enforced. This would potentially disrupt medication access for thousands of Arkansas residents who currently rely on CVS pharmacies. The corporation argues that the law represents an attack on free market principles and interstate commerce rather than a genuine consumer protection measure.
“[The law] represents an assault on free commerce between the states and the foundational principles of fair-market competition that underpin the Union,” CVS stated in its legal filing against Arkansas.
Express Scripts has similarly claimed the law will have “devastating consequences” for Arkansas residents. The company argues that enforcement would not only potentially cause pharmacy closures but would also disrupt established patient-pharmacist relationships that have developed over many years. This disruption, they claim, would be particularly harmful to vulnerable populations who depend on consistent access to medications and pharmacy services.
State Officials Defend Law Against “Outsized Power” of PBMs
Arkansas Attorney General Tim Griffin has strongly defended the legislation, framing it as a necessary step to protect consumers and independent pharmacies from corporate overreach. The law represents part of a broader effort by states to regulate PBMs, which have faced increasing scrutiny nationwide for their role in the pharmaceutical supply chain and their impact on drug prices and pharmacy reimbursements.
“[PBMs] wield outsized power to reap massive profits at the expense of consumers,” Attorney General Tim Griffin stated in defense of the law.
The conflict in Arkansas is not isolated, as it represents part of a growing movement among states to challenge the market power of pharmacy benefit managers. A coalition of attorneys general has been advocating for similar federal legislation, indicating that this battle over pharmacy regulations and corporate power in the healthcare space is likely to continue expanding. Arkansas’s law has positioned the state at the forefront of this nationwide effort to rebalance power in the pharmaceutical supply chain and protect independent pharmacies from extinction.
