Arkansas Law Takes Unprecedented Step to Prohibit PBM Ownership of Pharmacies

The National Law Review

Authors: Theresa C. Carnegie, Hassan Shaikh, Samantha Hawkins of Mintz

On April 16, 2025, Arkansas Governor Sarah Huckabee Sanders signed into law House Bill 1150, now Act 624 (the Act), making Arkansas the first state in the nation to prohibit pharmacy benefit managers (PBMs) from acquiring or holding a direct or indirect interest in a pharmacy. The Act—which broadly prohibits PBM ownership in retail and mail-order pharmacies—moves forward a policy initiative that has stagnated at the federal level following the introduction of the Patients Before Monopolies (PBM) Act, and could provide a blueprint for other states to pass similar legislation.

Overview of the Act

Under the Act, as of January 1, 2026, the Arkansas State Board of Pharmacy (Board) must either revoke or not renew pharmacy permits where the permit holder is a PBM or its subsidiary, is an entity managed by a PBM, or is an entity that has a direct or indirect ownership interest in a PBM. The Act’s only exemption allows pharmacy employers and pharmacies to maintain a direct or indirect interest in a PBM if: (1) the pharmacy employer is the sole Arkansas client of such PBM; and (2) the pharmacy exclusively services the employees and dependents of the pharmacy employer while using the PBM in Arkansas. 

Limited Use Permits. Until September 1, 2027, the Board may convert the pharmacy permit of a pharmacy owned by a PBM into a limited use permit, allowing such pharmacy to sell certain rare, orphan, or limited distribution drugs that otherwise would be unavailable in the market for a minimum of 90 days. Before January 1, 2026, the Board will issue a written policy outlining (i) how patients, pharmacies, or healthcare providers may notify the Board of a drug’s unavailability in the market; (ii) how pharmacies may request a limited use permit from the Board, (iii) timing for Board decisions; and (iv) a process for making emergency determinations due to patient needs.

Extensions or Renewals Pending Sale of Pharmacy to Eligible Buyer. For pharmacies subject to the Act, the Board has the discretion to extend the use, or issue a renewal, of a permit for a pharmacy that offers same-day patient access for pharmacist services, a prescription for a controlled substance, mental health services, or other critical patient healthcare services, provided that there is a pending sale of the pharmacy to an eligible buyer.

Critical Dates. Ninety days before January 1, 2026, the Board must provide written notice to any pharmacy permit holder that it believes is in violation of the Act. Pharmacies in receipt of such notice will not have long to react; any pharmacy in receipt of notice from the Board must provide written notice to each patient and each patient’s prescribing healthcare provider that has used the pharmacy within the previous year that, beginning in the new year, the pharmacy will no longer be able to dispense retail drugs to the patient. Such notice will only be deemed sufficient if it (1) is delivered 60 days prior to January 1, 2026; (2) is transmitted via mail, email or through the patient portal; (3) contains the Board’s phone number and email address; and (4) contains a list of Arkansas pharmacies holding an active pharmacy permit that are not in violation of the Act. Any pharmacy in violation of the Act that fails to meet the compliance requirements by January 1, 2026, will have its pharmacy permit revoked or not renewed.

Impact of the Act

Passage of the Act has already had immediate industry effects... CONTINUE READING