CVS has told Newsweek that some of Arkansas’ only 24-hour pharmacies are at-risk of closure because of new state law signed by Governor Sarah Huckabee Sanders last month.
Reports over the weekend suggested the pharmacy giant was looking to close all 23 of its stores in the state, ahead of legislation which prevents drug middlemen, known as Pharmacy Benefit Managers (PBMs), from owning and operating pharmacies.
“All of our 23 Arkansas stores are currently open and will continue to operate for the immediate future. We’re doing everything we can to continue to provide pharmacy services to our 340,000+ Arkansas pharmacy patients,” a CVS spokesperson said Tuesday morning.
Why It Matters
CVS said that passing Act 624, as the bill became known, puts the services available to its customers at risk. Those who advocated for the move said they wanted to protect independent pharmacies and stop patients from being abused.
What To Know
Sanders said in April that PBMs “take advantage of lax regulations to abuse customers” as she made Arkansas the first state to ban drug giants from owning pharmacies.
The governor and her Attorney General Tim Griffin said that PBMs had taken advantage of their position as price negotiators to benefit the pharmacies they owned and their shareholders, damaging independents in the process.
CVS told Newsweek that there were 14 more independent pharmacies operating in the state than there were in 2019, and that CVS Caremark reimburses them at a higher rate than its own pharmacies—at 61 percent.
The company said it believed Act 624 would shut pharmacies down and cut people off from health care once it comes into force January 1, 2026.
PBMs are the middlemen between drug companies, insurers, and the pharmacies themselves, negotiating on the supplies and prices of medications, affecting how much providers and patients pay.
One of the key issues with PBMs is a lack of transparency on how they operate, with no obligation for them to share details with insurance companies on the formulas they use to determine payment share.
Per the Center for American Progress (CAP), CVS Health accounted for a third of the PBM market in 2022, with Cigna and UnitedHealth taking up the next largest chunks at 24 and 22 percent respectfully.
Sanders and those in the Arkansas General Assembly who pushed for the law change in the state argue that these big companies do not lower costs and only benefit themselves, but CVS said it believed this reasoning was being used to enact a law which would only negatively impact customers.
What People Are Saying
A CVS spokesperson told Newsweek: “Facts should matter more than rhetoric, and a simple economic analysis could have avoided all this chaos…Small businesses, employers, health plans and others are going to have to pay more for prescription drugs starting next year because of this new law.
“Proponents of the bill have consistently made misleading claims about the need and rationale for this legislation, while downplaying the devastating impact it will have on patient care.”
Governor Sarah Huckabee Sanders, in an April press release: “These massive corporations are attacking our state because we will be the first in the country to hold them accountable for their anticompetitive actions, but Arkansas has never been afraid to be a conservative leader for America.”
John Vinson, CEO of the Arkansas Pharmacists Association, in a press release in April: “This is a major victory for Arkansas patients, local pharmacies and the integrity of our health care system. If we want to protect patient choice, lower drug costs and support local businesses, then ending PBM ownership of pharmacies is essential.”
What’s Next
CVS said it is reviewing its options for its 23 pharmacies in Arkansas, which all remain open for now.
The post All CVS Locations in One State at Risk Over PBM Law appeared first on Newsweek.
