Arkansas PBM law put on hold by federal judge

U.S. District Judge Brian Miller on Monday (July 28) blocked an Arkansas law to prohibit pharmacy benefit managers (PBMs) from owning PBMs and pharmacies from going into effect.

PBMs are the middlemen between insurance plans and pharmacies that set drug prices. Arkansas lawmakers and Gov. Sarah Sanders passed a first-in-the-nation law this past legislative session to restrict ownership of PBMs in an effort to protect smaller independent pharmacies across the state that complained about price variances due to PBM influence.

In a 17-page ruling, Miller ordered a preliminary injunction of the new state law claiming the plaintiff, Express Scripts, a PBM that operates pharmacies, should be protected in the public interest.

“The public interest favors plaintiffs because it is ‘always in the public interest to prevent the violation of a party’s constitutional rights,'” said Miller.

Act 624 of 2025, which takes effect on Jan. 1, 2026, is the state law in question.

Besides Express Scripts, another PBM that owns pharmacies in Arkansas — CVS Health — has filed a federal lawsuit. The company issued a statement after Miller’s ruling.

“We’re pleased with the court’s decision to grant a preliminary injunction to stop the implementation of Act 624,” said Amy Thibault, a spokesperson for CVS Health. “We continue to be focused on serving people in Arkansas and are actively looking to work together with the state to reduce drug prices and ensure access to pharmacies.”

Arkansas Attorney General Tim Griffin said Monday he plans to appeal the ruling.

“I respect the court’s decision and plan to appeal,” Griffin said.

NO SLAM DUNK
While Miller issued the preliminary injunction, his reasoning offered ammunition for both sides as the court case moves forward.

Miller listed his reasons for the injunction, citing that a “preliminary injunction is an extraordinary remedy. Generally, a ‘fair chance’ of prevailing on the merits is required to grant a preliminary injunction.” He noted Express Scripts had a “likelihood of success based on the merits of the case” and that they were “likely to prevail on their Commerce Clause claim.”

“Act 624 appears to overtly discriminate against plaintiffs as out of state companies and the state has failed to show that it has no other means to advance its interests” Miller wrote. “This is true because section one of Act 624 specifically states that its purpose is to eliminate plaintiffs’ ‘business tactics that have driven locally-operated pharmacies out of business.’ This phrase ‘artlessly discloses [the state’s] avowed purpose to discriminate against interstate goods.’”

“I disfavor reviewing legislative history when interpreting the meaning of statutes because elected officials, whether federal or state, can junk up the record with meaningless drivel,” wrote Miller in addressing one of the concerns for his injunction. He also said plaintiffs were likely to prevail on their Supremacy Clause claim and Express Scripts would suffer “irreparable harm” without the injunction due to “unrecoverable economic loss.”

“The balance of equities and public interest also favor plaintiffs,” he said. “No harm is caused when defendants are enjoined from enforcing an unconstitutional law; therefore, the balance favors plaintiffs.”

However, Miller stated there were a number of claims in the case that would lead to a denial of an injunction. He noted plaintiffs are unlikely to prevail on their Privileges and Immunities Clause claim, their ERISA preemption claim, the Medicare preemption claim, the Bill of Attainder claim, the Takings Clause of the constitution, and an Equal Protection Clause claim.

You can read Miller’s ruling here.