Federal judge blocks Arkansas law banning PBM-owned pharmacies

A U.S. federal court judge has blocked first-of-its-kind legislation enacted in Arkansas to ban pharmacy benefit managers ((PBMs)) from owning or operating pharmacies in the state starting next year.

In April, Gov. Sarah Huckabee Sanders signed Act 624, a law that bars PBMs from receiving or holding permits to operate a drugstore in Arkansas, effective January 1, prompting multiple lawsuits from the industry.

The nation's three largest PBMs, owned by UnitedHealth (NYSE:UNH), CVS Health (NYSE:CVS) and Cigna (NYSE:CI), along with the trade group Pharmaceutical Care Management Association, challenged the law in four separate lawsuits between May and June.

Combining the lawsuits into one, Judge Brian Miller for the U.S. District Court for the Eastern District of Arkansas granted the plaintiffs’ request for a preliminary injunction on Monday.

In his 17-page order, the judge determined that Act 624 violates the federal Commerce Clause and conflicts with the requirements for Tricare, a health insurance program for active and retired service members and their families. The case is expected to go to trial, according to Arkansas Advocate.