PBM bill heads to governor; Senate prison funding bill pauses

A bill to prohibit pharmacy benefit managers (PBMs) from owning pharmacies in Arkansas comfortably cleared the Senate on Wednesday (April 9), but Gov. Sarah Sanders has not signaled her support or disagreement on the bill.

House Bill 1150 by Rep. Jeremiah Moore, R-Clarendon, and Sen. Kim Hammer, R-Benton, passed the state Senate on a 26-9 vote.

The bill would prevent PBMs like CVS Health from operating retail pharmacies in Arkansas.

Pharmacy benefit managers manage prescription drug benefits for health insurers and other payers. By processing drug claims, they effectively set the rates at which pharmacies are reimbursed for their services, as well as provide the reimbursements.

The four largest PBMs control 70% of the market, according to the American Medical Association. CVS Health controls 21.3%, OptumRx controls 20.8%, Express Scripts controls 17.1%, and Prime Therapeutics controls 10.3%.

They also are “vertically integrated” in that they operate their own retail establishments that compete against the independent pharmacies they reimburse. CVS operates 23 pharmacies in Arkansas.

With the bill clearing its final legislative hurdle in the Senate, HB 1150 heads to Sanders’ desk for signature or veto.

CVS Health, which lobbied heavily against the bill, issued a statement on Wednesday.

“This bill rips medicine away from sick patients and makes it harder for people to achieve better health,” said Phil Blando, CVS executive director for external affairs. “A veto will protect communities, improve care, and help hundreds of thousands of Arkansans get the medicines they need. Gov. Sanders should choose people over misguided policy that will lead to serious consequences.”

A spokesman for the governor was asked about her position on the bill, but his statement did not indicate if she would sign or veto the measure.

“Gov. Sanders is working to protect Arkansas consumers and reduce prescription drug costs, including through her announcement last year imposing nearly $1.5 million in PBM fines – the largest pharmaceutical enforcement action in Arkansas history,” Sanders’ spokesman Sam Dubke told Talk Business & Politics.

A bill to fund a new state prison, SB 354, was not considered on the Senate floor Wednesday. It had failed in five previous Senate votes.

The bill, supported by Sanders, would appropriate $750 million for a new state prison in Franklin County. It received 21 votes on Tuesday, still six votes short of the 27 needed to clear the full Senate. It must also receive 75 votes in the Arkansas House of Representatives.

Lawmakers plan to recess the legislative session on Wednesday, April 16.

In other legislative business, a bill to extend Medicaid coverage for postpartum mothers failed in its Senate committee hearing on Wednesday.

House Bill 1004, By Rep. Aaron Pilkington, R-Knoxville, passed the House 71-10 last week. The Wednesday vote in the Senate Public Health, Welfare and Labor Committee likely stops the bill from moving forward. Sanders has opposed the measure repeatedly. DHS officials testified against the bill in committee, claiming HB 1004 would duplicate services and cost more money.