On April 16, 2025, Arkansas enacted Act 624 (the Act), an unprecedented law prohibiting pharmacy benefit managers (PBMs) from owning or operating pharmacies in the state. As we discussed in our May 2025 blog post, the law’s passage has already resulted in market disruptions, and PBMs with vertically integrated business models have cautioned that the law will limit patients’ access to drugs and cost many local jobs.

Now, two of the nation’s largest PBMs, CVS Health and Cigna’s Express Scripts (ESI), have filed federal lawsuits seeking to block implementation of the Act on the grounds that the Act is unconstitutional, preempted by federal law, and harmful to Arkansans.

Industry Pushback: Legal and Operational Threats

Within weeks of the law’s signing, CVS and Express Scripts filed suit in the U.S. District Court for the Eastern District of Arkansas, arguing that the Act is unconstitutional on multiple grounds. They claim the law would force a reorganization of national operations and disrupt mail-order prescription services relied upon by thousands of Arkansas residents.

While Governor Sarah Huckabee Sanders has framed the legislation as a stand against PBMs, CVS Health contends that the law is “bad policy that accomplishes just the opposite,” stating that the law will lead to the closure of 23 CVS Pharmacy® locations, eliminate hundreds of jobs, and increase the cost of prescription drugs by millions of dollars. Similarly, ESI argues in its complaint against members of the Arkansas State Board of Pharmacy that the law will create “pharmacy ‘deserts’ for the nearly 40% of Arkansans who live in rural areas,” and deny many Arkansans access to “lifesaving drugs at affordable prices.”

The lawsuits also argue that the Act is unconstitutional. In its complaint, CVS Health argues that the law was not implemented to protect patients but, rather, to exclude CVS Health specifically in favor of independent, in-state pharmacies that often charge higher prices for their prescription medicines. CVS asserts this practice violates the Constitution’s Dormant Commerce Clause and Equal Protection rights because it discriminates against out-of-state pharmacies to offer a boon to the state’s local pharmacies. CVS further alleges that the law is preempted by two federal laws: the Employee Retirement and Income Security Act (ERISA), because it interferes with benefit plan design, and the Medicare Prescription Drug Improvement and Modernization Act of 2003, because “it seeks to regulate Medicare Advantage and Medicare Part D plans that Congress intended for federal standards to exclusively govern.”

ESI’s complaint brings a similar claim under the Dormant Commerce Clause based on the Act’s alleged discrimination against out-of-state pharmacies, but also adds three additional grounds to strike down the Act. ESI alleges that the Act violates the Constitution’s Privileges and Immunities Clause by prohibiting out-of-state entities from working and providing services in Arkansas and that it violates the Bill of Attainder Clause by specifically targeting the nation’s three largest PBMs and barring them from participating in their vocation. ESI additionally contends the Act is preempted by the federal government’s TRICARE program—which delivers the military health benefits through private contractors—because ESI is the government’s principal mail-order-pharmacy TRICARE provider, and the Act thus attempts to force the federal government to select a new provider for Arkansas.

State Response and National Implications

This is not Arkansas’s first challenge to PBM practices. In Rutledge v. Pharmaceutical Care Management Association (2020), the U.S. Supreme Court upheld the state’s authority to regulate PBM reimbursement rates. However, the Act goes further by targeting companies’ rights to vertically integrate PBMs with pharmacies, raising new legal questions about how far states can go in regulating PBMs.

Similar to Rutledge, the outcome of these lawsuits could have significant ripple effects across the country. Numerous states are reportedly considering similar legislation, and a court ruling upholding Arkansas’s law could embolden those efforts. Conversely, if the law is struck down on constitutional or preemption grounds, it may set firm limits on states’ ability to regulate PBM structure and ownership. The Arkansas Attorney General Tim Griffin pledged to defend the Act vigorously.

This legal battle may also influence broader discussions in Congress, where bipartisan interest in PBM reform continues to grow.

What Comes Next

The lawsuits are in their early stages, but we could see previews of the court’s approach to the legal issues in the near term. Both lawsuits request preliminary injunctive relief which, if granted by the Court, would push back the Act’s effective date and stave off its immediate effects, and could set up a rapid pursuit of appeals to higher courts. While the legal issues will ultimately be decided in federal court, the policy debate over PBM reform is far from settled.