The state of Arkansas continues to demonstrate a marked and decisive escalation in oversight of pharmacy benefit managers (PBMs), with regulatory actions converging on one practical outcome: creating clearer pathways for independent pharmacies to recover money tied to under reimbursement. The Arkansas Insurance Department’s (AID) implementation of Rule 128, coupled with active enforcement against named PBMs, is transforming complaint data into enforcement leverage, prospective payment corrections, and, critically, potential restitution via administrative processes and consent resolutions.
What is Rule 128?
Rule 128, formally titled “Fair and Reasonable Pharmacy Reimbursements, ” was adopted by the Arkansas Legislative Council in December 2024 after initially being authorized as an emergency rule in September 2024. It establishes what is described as a “Fair and Reasonable Pharmacy Compensation Program” designed to ensure that pharmacy reimbursements result in an adequate network of pharmacies for health benefit plans.
Under Rule 128, health benefit plans must file written reports with the Commissioner describing their pharmacy compensation data. The initial reporting period ran from November 30, 2024 through February 17, 2025 for plan year 2024/2025, with ongoing annual reporting requirements thereafter. Upon receipt of this data, the Commissioner is authorized to review, approve, or deny a plan’s pharmacy compensation program in consultation with AID’s actuary. If the Commissioner determines that a plan’s reimbursements are not fair and reasonable, the Commissioner may require the plan to pay an additional dispensing cost to pharmacies. Importantly, plans may not pass this cost on to subscribers beyond the amounts already designated as co-pays, co-insurance, and deductibles.
Rule 128 also mandates confidentiality protections for submitted data pursuant to Ark. Code Ann. § 23-92-506(a)(2), shielding proprietary information from public disclosure while requiring publication of average approved dispensing fees by payor. For plan year 2025, the dispensing cost requirement applies prospectively, beginning thirty days after the Commissioner issues a written decision, with full annualization taking effect for plan years 2026 and beyond. Violations of Rule 128 are subject to fines and penalties under Ark. Code Ann. § 23-92-508.
The 2025 Enforcement Landscape
In May 2025, AID informed the Arkansas Legislative Council (ALC) that 654 plans, covering roughly 340,000 Arkansans, consistently reimburse pharmacies below the National Average Drug Acquisition Cost (NADAC). Local Arkansas media emphasized October and December snapshots, noting hundreds of plans flagged as “deficient” for below-NADAC reimbursements and the state’s reliance on Rule 128 to compel data and justify rates. Together, the Rule 128 reporting infrastructure and AID bulletins frame an ongoing, iterative oversight process that treats reimbursement as central to network adequacy and fair compensation.
How Enforcement Translates to Recovery for Pharmacies
Three channels exist under which a pharmacy may seek damages stemming from under reimbursement by PBMs: structured complaints and appeals; targeted enforcement that can incorporate restitution; and prospective pricing corrections that reduce future shortfalls.
First, AID has institutionalized complaint intake and NADAC-specific grievances, with forms and email pipelines expressly provided to pharmacies. These mechanisms, anchored in the PBM Licensure Act and Rule 128, funnel transaction-level evidence into investigations that can support enforcement and settlement discussions. The existence of standardized NADAC complaint forms lowers procedural friction for independent pharmacies, helping them surface underpayments quickly and document patterns across claims. While not likely to provide a direct route to recovering previous underpayments, this increased enforcement efficiency is demonstrating its ability to prevent under reimbursements before they happen.
Second, AID’s active docket of PBM enforcement actions since spring 2025 shows that the department is willing to initiate administrative penalties, convene hearings, and accept consent orders—measures that can include corrective payments depending on case posture and negotiated terms. The department’s May 2025 status report identified actions involving Express Scripts, Magellan, CVS Caremark, Prime Therapeutics, SaveRx, OptumRx, and Navitus, with at least one matter (Pharmapix) resolved via a consent order and penalty for below-NADAC reimbursements. While penalties flow to the state, consent orders and administrative resolutions are common levers to address claim-level underpayments, and pharmacies can use the complaint record to press for make-whole outcomes tied to specific claims. The reported decline in complaints after Rule 128’s approval suggests that the oversight pressure is already influencing PBM practices and opening practical resolution pathways.
Third, Rule 128 empowers the Commissioner to impose a fair and reasonable cost-to-dispense amount when plan reimbursements and related processes jeopardize an adequate, sustainable pharmacy network, thereby lifting reimbursements prospectively and reducing recurring shortfalls that erode pharmacy margins. The rule binds plans to periodic reporting (initially November 30, 2024 through February 17, 2025 for plan year 2024/2025) and authorizes the Commissioner to approve or deny cost-to-dispense requirements upon actuarial review, with confidentiality protections for submitted data and publication of average approved fees by payor. As AID initially moves to apply cost-to-dispense to the 654 below-NADAC plans, independent pharmacies should experience reimbursement uplift on low-cost generics and other core items, alongside opportunities to reconcile historical underpayments via the complaint-enforcement pipeline.
A View to 2026
The state’s combination of granular reporting, public metrics, and targeted enforcement implemented through Rule 128 is reshaping PBM accountability in Arkansas. In particular, in the latter-half of 2025, media and agency reports have made clear that AID is prepared to couple data-driven findings with administrative actions to address below-NADAC reimbursements and preserve network adequacy, including cost-to-dispense remedies where warranted.
For independent pharmacies, the practical significance is twofold: higher prospective reimbursements as cost-to-dispense mandates take hold, and a stronger legal and administrative basis to seek repayment of improperly collected funds through the complaint, investigation, and consent-order continuum.
How Frier Levitt Can Help
If you are a pharmacy, navigating PBM reimbursement issues, or if you were previously impacted by under reimbursement, now may be the right time to reassess your options. At Frier Levitt, we routinely advise clients across the pharmacy services industry in connection with reimbursement reconciliation and recovery matters, and we welcome the opportunity to assist all independent pharmacies seeking to enforce their rights against PBMs.
