A federal judge recently issued a preliminary injunction blocking enforcement of Arkansas Act 624 of 2025, a law that would have prohibited pharmacy benefit managers (PBMs) from owning or operating pharmacies in the state.
Pharmacy benefit managers serve as intermediaries between health plans, drug manufacturers, and pharmacies. When a person with prescription drug coverage fills a prescription, the PBM reimburses the pharmacy at a negotiated rate, and the insurer pays the PBM. Some PBMs, such as CVS, own their own pharmacies.
Supporters of Act 624 have said the law is needed because PBM ownership of pharmacies creates conflicts of interest, is anti-competitive, and can lead to higher prices for consumers. A group of PBMs and the Pharmaceutical Care Management Association, which represents PBMs, is challenging the law, arguing it is unconstitutional. CVS
After a hearing on July 23, 2025, U.S. District Judge Brian Miller granted motions for a preliminary injunction blocking the law, which was set to take effect January 1, 2026. Miller found that the law would likely violate the Commerce Clause of the U.S. Constitution by unfairly discriminating against the plaintiffs as out-of-state businesses and failing to show that this would be the only way to advance the state’s interest. The judge also found that the law would likely violate the Supremacy Clause by interfering with the ability of TRICARE, the federal health benefits program for military personnel and retirees, to contract with PBMs. Under the Supremacy Clause, state laws that interfere with or are contrary to federal laws are invalid, Miller noted.
The practices of pharmacy benefit managers have been under scrutiny in recent years at both the state and federal levels. Arkansas lawmakers enacted legislation in 2015 to regulate pharmacy benefit managers’ payments to pharmacies, and in 2020 the U.S. Supreme Court upheld the law. In June 2022, the Federal Trade Commission decided to launch an examination into the business practices of PBMs.
On July 31, the Arkansas State Board of Pharmacy filed notice that it will appeal the order blocking Act 624. Litigation will continue in the U.S. District Court for the Eastern District of Arkansas. Because Arkansas is the first state to enact a ban on ownership of pharmacies by PBMs, Act 624, if upheld, could serve as a model for other states seeking to rein in these prescription drug middlemen.
