Arkansas has taken bold action to restore transparency and fairness to the prescription drug system by enacting HB 1150 (Act 624), legislation that prohibits pharmacy benefit managers (PBMs) from owning or operating retail and mail-order pharmacies in the state.
Signed into law by Gov. Sarah Huckabee Sanders in April, the legislation addresses longstanding concerns about conflicts of interest, market consolidation and patient access created by vertically integrated PBM pharmacy models. The law takes effect on Jan. 1, 2026, and sets a national precedent for reining in PBM dominance over drug pricing and distribution.
Strengthening Oversight & Ending Self-Dealing
At the core of HB 1150 is a simple principle: PBMs should not be allowed to profit from controlling both the price and the delivery of prescription medications. By banning direct and indirect PBM ownership of pharmacies, the law aims to restore a level playing field for independent pharmacies and increase choice for patients and prescribers.
Under the law:
- PBM-affiliated pharmacies must be divested by Jan. 1, 2026;
- The Arkansas State Board of Pharmacy will identify permit violations by July 1, 2025; and
- Affected pharmacies must notify patients and prescribers at least 60 days in advance of permit loss.
Importantly, the law includes limited-use permits and patient safeguards during the transition, including carve-outs for rare and orphan drug distribution and provisions for urgent-care pharmacy continuity.
Protecting Access for Patients & Providers
For rheumatologists and patients with complex, chronic diseases, HB 1150 offers a vital course correction. PBM-owned specialty pharmacies have often restricted medication access through opaque formulary design, limited networks and exclusive dispensing contracts. These practices have created unnecessary delays, confusion and financial hardship for patients living with rheumatologic disease.
Supporting Rural & Independent Pharmacies
HB 1150 is also a victory for local pharmacies that have been squeezed out of PBM networks or forced to accept unsustainable reimbursement rates. Many independent and rural pharmacies, often the only accessible healthcare provider in their communities, have long advocated for reforms to limit PBM overreach.
By banning vertical integration, Arkansas is opening the door to more pharmacy options and community-based solutions for patients. The law’s limited exceptions ensure that patients receiving rare or limited-distribution drugs are not left behind during the transition.
Setting a National Example
Arkansas’ leadership reflects growing bipartisan momentum across the country to reform PBM practices. The passage of HB 1150 aligns with calls from 39 state attorneys general urging Congress to dismantle monopolistic pharmacy ownership structures and pass federal legislation such as the Patients Before Middlemen Act.
Other states are already considering similar reforms, signaling that Arkansas’ approach could become a model for nationwide PBM accountability. However, those reforms could be delayed or derailed pending the outcome of a recently filed lawsuit.
The Pharmaceutical Care Management Association (PCMA), the national PBM trade group, is challenging the law’s constitutionality. The group argues it violates the Commerce Clause by discriminating against out-of-state companies and the Privileges and Immunities Clause by favoring in-state pharmacies. While a final disposition will not be known for quite some time, it would not be surprising for a temporary injunction to be issued to prevent the implementation of the Arkansas law until the case has worked its way through the legal process.
Conclusion
HB 1150 represents a decisive step toward a more transparent and equitable prescription drug system. By separating PBM business interests from pharmacy ownership, Arkansas is prioritizing patients, supporting providers and promoting a healthcare marketplace built on fairness while fighting against vertical integration and monopolistic business models.
Joseph Cantrell, JD, is the director of state affairs and community relations for the ACR.
