Arkansas Law Aiming at PBM Ownership Could Lead to CVS Closures
CVS Corp. officials say they will close more than 20 pharmacies in Arkansas after Gov. Sarah Huckabee Sanders signed legislation that bans pharmacy benefit managers from owning pharmacies.
The CEO of UnitedHealth Group’s OptumRx division, meanwhile, last week said of the Arkansas law that he and his team are “honestly not sure what problem they’re trying to solve.” The legislation, Patrick Conway said on United’s quarterly earnings conference call, could leave patients receiving treatments for schizophrenia, depression and other conditions without their medicines.
“We’re significantly concerned about this,” Conway said April 17. “We’ll work with the state in the regulatory process post legislation to try to address those populations and maintain access. But we want you to hear clearly from us that our concern is about patients and maintaining access.”
CVS, which runs 23 pharmacies in Arkansas, campaigned against the Arkansas legislation early this year and said last week the measure accomplishes the opposite of what it set out to do.
“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,” officials with CVS said in a statement.
Like their peers at United, executives of the company that owns Aetna said they will work with lawmakers to try to preserve access.
At the federal level, PBM-focused action doesn’t appear imminent even though more than three dozen state attorneys general have called for such measures. But President Donald Trump last week issued an executive order targeting prescription drug prices more broadly. The order includes several items centered on PBMs: One seeks recommendations by mid-July about how to create “a more competitive, efficient, transparent, and resilient pharmaceutical value chain” while another seeks to improve the transparency around how PBMs are paid, directly and indirectly.
Players on both sides of the PBM debate were constructive about executive order. The National Community Pharmacists Association said “the devil will be in the details” but added that it is optimistic the White House will be able to level the playing field for independent pharmacies. UnitedHealth CEO Andrew Witty, meanwhile, told analysts on the company’s conference call he’s encouraged by the “quite good sensible questions” the order raises around the role of drug manufacturers.
“I'm hopeful as the administration explores the questions that the EO raises that this will become a much more thoughtful review of how to reform the whole value chain and not simply one component where I think you can make very, very serious mistakes which could really damage patient access,” Witty said.
About the Author
Geert De Lombaerde
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post for more than a decade and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.