AR Gov. Sarah Huckabee Sanders Signs First-in-the-Nation Law to Break Up Big Pharma's Provider Network

Arkansas Governor Sarah Huckabee Sanders has done something unprecedented, and just like her call for SNAP reform, she has now driven a MAHA stake through the heart of Big Pharma. In signing House Bill 1150 (HB 1150) on Wednesday, Sanders has effectively disconnected the pharmacy benefit managers (PBM) from the profit centers of its retail chains.

The PBMs control price and product monopoly, which puts a stranglehold on the ability of local pharmacies and providers to survive and grow. The signing into law of HB 1150 also looks to combat the increased price of medications for Arkansas consumers:

Arkansas became the first state in the nation to prevent healthcare conglomerates from operating drugstores here when Gov. Sarah Huckabee Sanders signed House Bill 1150 on Wednesday.
State law already regulates what pharmacy benefit managers (PBMs) pay to reimburse independent pharmacies, but pharmacists have complained that the companies violate the law. The state has also fined four PBMs a total of $1.47 million for paying Arkansas pharmacies below the legally required amount for prescription drugs.
PBMs negotiate prescription benefits among drug manufacturers, distributors, pharmacies and health insurance providers, and the biggest ones also own pharmacies and insurers. The Federal Trade Commission released an interim report in July 2024 saying these conglomerates are eliminating competition and increasing drug prices at the expense of patients.
HB 1150 headed to Sanders’ desk April 9 after clearing the Senate with a bipartisan 26 votes, six days after it passed the House with 89 votes. The bill generated hours of discussion and public comment in the House and Senate committees on Insurance and Commerce this month.
“These massive corporations are attacking our state because we will be the first in the country to hold them accountable for their anticompetitive actions,” Sanders said in a statement Wednesday.

The average consumer knows that their medication is overpriced. What they may be unaware of is the control and regulation exerted by the pharmaceutical monopoly. PBMs are the third-party administrators for health insurers like Blue Cross, United Health, Medicare Part D, and others. Along with this control, they are also embedded into the retail pharmacy chains: CVS and Walgreens primary among them. They control the formularies, the pharmacy networks, and set who manages the drugs in use.

Think about all the COVID madness, when life-saving drugs like hydroxychloroquine and Ivermectin were being banned by major pharmacies, while mifepristone (the abortion pill) was allowed without restriction. You can thank the PBMs for that. Companies like CVS Caremark and Optum RX run the show through these PBMs, which in turn are owned by a top-10 health insurer like Blue Cross or United Health. One hand washes the other and helps to maintain the entire health industrial complex and therefore what you can access and how much you pay:

OptumRX, Express Scripts and CVS Caremark — the three largest PBMs — are each owned by much larger corporations that each also own a top-10 health insurer. Together they control about 80% of the U.S. prescription market, according to last year’s Federal Trade Commission report.

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So, Sanders' move is huge and could set a precedent for other states to follow. To be expected, the usual suspects are not happy about this development:

CVS Health issued a statement last week urging Sanders to veto HB 1150, calling it “misguided policy.” The organization, which includes the CVS Caremark PBM, issued another statement Wednesday afternoon.
“CVS Health welcomes a good faith discussion with policy makers in Arkansas and across the country on ways to make medicine more affordable and accessible,” the statement said. “Unfortunately, HB1150 is bad policy that accomplishes just the opposite: it will take away access to pharmacy care in local communities, hike prescription drug spending across the state by millions of dollars each year, and cost hundreds of Arkansans their jobs.”

Sanders did not listen, setting the stage for what could be the erosion of the pharmaceutical monopoly. There will be close watch on these developments as other red state legislatures review their relationship with PBM networks.

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