Radar on Drug Benefits

  • ‘Tectonic’ Arkansas PBM Legislation May Upend Industry

    Arkansas Gov. Sarah Huckabee Sanders (R) on April 16 signed into law a bill that made the state the first to prohibit PBMs from owning or operating pharmacies. Benefits experts and trade groups tell AIS Health, a division of MMIT, that the legislation could have a significant impact on the PBM industry and potentially expand to other states — although they expect the major PBMs to fight back with lawsuits.  

    If the law goes into effect on Jan. 1, 2026, as intended, PBMs would be forced to divest the retail, mail-order and specialty pharmacies they own in Arkansas if they want to continue doing business as PBMs there. Even if a PBM’s mail order or specialty pharmacy is in another state, it could not deliver prescriptions to Arkansas or care for patients in the state. The legislation, HB1150, would primarily affect the Big Three PBMs of CVS Health Corp.’s Caremark, UnitedHealth Group’s Optum Rx, and The Cigna Group’s Express Scripts, which collectively process 80% of total U.S. prescriptions and have significant pharmacy assets in Arkansas. 

  • PBMs Warn of Unintended Consequences of Arkansas PBM Law

    Major PBMs are warning that a recently passed law in Arkansas that bans them from owning pharmacies could have unintended consequences and hurt medication access for underserved people, including those who have chronic conditions and those in rural areas. The legislation, HB1150, declares that PBMs starting on Jan. 1, 2026, will not be able to own or operate retail, mail-order or specialty pharmacies in Arkansas, which is the first state to adopt such a mandate. 

    Patrick Conway, M.D., CEO of UnitedHealth Group’s Optum Rx PBM, told analysts on an April 17 earnings call that the legislation “concerns us significantly” and said that “we’re honestly not sure what problem they’re trying to solve.”  

  • Executive Order Calls for PBM Changes, End of IRA ‘Pill Penalty’

    A recent executive order from President Donald Trump laid out a host of directives with the goal of lowering drug prices and increasing transparency from PBMs. But experts tell AIS Health that the PBM-related goals are not yet very clear. 

    The April 15 order notes the first Trump administration’s efforts, such as drug price transparency rules, encouraging development of generic and biosimilar drugs, and requiring that “government-mandated discounts” are passed through to patients. Trump then said that former President Joe Biden’s administration “reversed, walked back, or neglected many of these initiatives” and signed the “misnamed” Inflation Reduction Act (IRA) into law. While the executive order said the Medicare Drug Price Negotiation Program has a “commendable goal” of reducing Medicare drug prices, “its administratively complex and expensive regime has thus far produced much lower savings than projected.” 

  • Trump’s New Executive Order Delivers a Win for Big Pharma

    With a new executive order on prescription drug prices, President Donald Trump directed HHS to extend the period in which new-to-market small molecule drugs are exempt from Medicare price negotiation, a policy change that pharmaceutical companies have long supported.

    The Medicare Drug Price Negotiation Program, which is part of the Inflation Reduction Act, allows the federal government to negotiate the prices of select drugs if they are brand-name medications or biological products without generic or biosimilar equivalents. Drugs subject to negotiation also must have been on the market seven years (for small molecule drugs) or 11 years (for biologics) after FDA approval.

  • If PBMs Need Urgent Reform, Why Aren’t Their Clients Rebelling?

    Despite ongoing momentum toward PBM reform at both the state and federal level, many of the clients that hire PBMs — employers, unions, and commercial and government health plans — do not appear to be in a big hurry to fire them. That was one major observation made by Adam Fein, Ph.D., president of Drug Channels Institute (DCI), during a recent webinar titled “PBM Industry Update: Trends, Challenges, and What's Ahead.” 

    “The question I want to challenge you with is, what do the plan sponsors want? Because they’re the ones who, in some sense, are paying the bills,” Fein said during the April 4 webinar.  

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