In a groundbreaking move, Arkansas’ Governor Sarah Huckabee Sanders signed House Bill 1150 (HB 1150) into law yesterday, April 16, 2025. HB 1150, introduced by a group of state legislators, seeks to regulate the role of Pharmacy Benefits Managers (PBMs) within the state. The bill’s primary goal is to improve patient access to prescription medications and curb anticompetitive practices in the pharmacy sector. This legislation is a response to findings by federal agencies, including the Federal Trade Commission and the United States House Committee on Oversight and Government Reform, that highlighted evidence of anticompetitive business practices that have driven independent pharmacies out of business.
Restrictions on Pharmacy Permits for PBMs
A central provision of HB 1150 is the restriction on PBMs from holding any direct or indirect interests in permits for the retail sale of drugs or medicines in Arkansas. The Arkansas State Board of Pharmacy is responsible for revoking or not renewing permits for entities that violate this rule, ensuring that PBMs cannot monopolize the retail pharmacy market. This measure aims to eliminate conflicts of interest where PBMs could manipulate drug prices to their advantage, which HB 1150 suggests is akin to a “fox guarding the henhouse” as the PBM is both the price setter and the price taker.
Special Permits for Rare Drugs
The legislation allows for the issuance of special permits for certain rare, orphan, or limited distribution drugs that are not readily available in the market. This provision enables the Arkansas State Board of Pharmacy to evaluate the need for such drugs and issue permits accordingly, ensuring that patients have access to essential medications that might not be available through other means. This special permit provision is set to expire on September 1, 2027, unless extended by further legislation.
Notification Requirements
HB 1150 requires the Arkansas State Board of Pharmacy to conduct an initial review of all active retail pharmacy permits and notify permit holders that are likely to be in violation of the new regulations. Additionally, pharmacies that receive such notice must inform their patients and prescribing healthcare providers at least sixty days before January 1, 2026, that they will no longer be able to dispense retail drugs. This ensures that patients and healthcare providers have sufficient time to make alternative arrangements for obtaining necessary medications.
Impact on Pharmacies and PBMs
The impact of HB 1150 on pharmacies and PBMs is substantial. For PBMs, the legislation limits their ability to control retail pharmacy operations, thereby reducing their influence over drug pricing and availability. This is expected to create a more competitive market, benefiting independent, local pharmacies and potentially lower drug prices for consumers. For pharmacies, particularly those that are locally-operated, the bill provides a level playing field by curbing the anticompetitive practices of PBMs. Overall, the legislation aims to enhance healthcare delivery in the pharmacy market, ensuring fair access to prescription drugs and supporting optimal patient care. With Arkansas being the first state to introduce this type of legislation, it remains to be seen whether other states will follow suit.
How Frier Levitt Can Help
Contact Frier Levitt to understand the impact of this legislation on your pharmacy today, regardless of which state your pharmacy is located in.
