Arkansas Takes Aim at PBM Ownership of Retail Pharmacies

On April 17, 2025, Arkansas recently became the first state to enact broad restrictions on pharmacy benefit managers (“PBMs”) owning retail pharmacies within the state.

Proponents of the law argue that it will improve patient access to fairly priced prescription drugs and curb anticompetitive business practices. But opponents contend it unfairly targets the nation’s largest PBMs—some of which operate pharmacies in Arkansas— and could disrupt patient access to affordable medications.

Although Arkansas is the first state to enact such comprehensive legislation restricting PBM ownership of pharmacies, it is not the first to take aim at the issue. Louisiana, for example, passed a law that prohibits PMBs from steering consumers to pharmacies the PBM has an ownership interest in, unless it obtains certain acknowledgements.^[i] And several other states have also called for federal oversight or intervention on the issue. On April 14, a bipartisan group of 39 state attorneys general sent Congressional leadership a letter urging them to adopt national legislation similar to Arkansas’s.

Arkansas’s H.B. 1150 specifically prohibits a PBM from “acquir[ing]” a direct or indirect interest in, or otherwise “hold[ing],” an Arkansas retail pharmacy permit beginning January 1, 2026.^[ii] The law effectuates this change through the state’s pharmacy permitting system by requiring the Arkansas Board of Pharmacy (“Board”) to “revoke or not renew” any current pharmacy permit held by a PBM on or after January 1, 2026.^[iii]

There are two primary exceptions to this broad restriction. First, H.B. 1150 permits the Board to issue a “limited use permit” of no less than 90 days to pharmacies that would otherwise violate the law if the pharmacy meets a need “for rare, orphan, or limited distribution drugs.”^[iv] Second, the Board can also extend or renew an existing permit for pharmacies that offer certain critical patient care services if the PBM is in the process of selling the pharmacy to an eligible entity.^[v]

Holders of pharmacy permits issued before July 1, 2025 that will be affected by H.B. 1150 will receive written notice of cancellation. The Board is required to assess each active retail pharmacy permit in the state and send written notice to each permit holder it believes will violate H.B. 1150 by early October 2025.^[vi] Permit holders that receive this notice are required to provide to notify patients and their prescribing providers by early November 2025 that the pharmacy can no longer dispense retail drugs to the patient.^[vii] PBMs with pharmacies holding permits in Arkansas should lookout for notices from the Board, as that will trigger their obligation to notify patients.

Much remains uncertain about how H.B. 1150 will be implemented before its January 1, 2026 effective date. The future of PBM ownership of pharmacies in Arkansas will hinge on the Board’s forthcoming regulations. For example, the Board must establish the process and timeline for permit holders to request a “limited use permit” and the process for emergency determinations based on patient need.^[viii] In the meantime, PBMs and their affiliated pharmacies should review their Arkansas operations, evaluate how the law applies to them, and develop compliance and operational strategies before the H.B. 1150 becomes effective.