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Pharmacy giant CVS is reportedly on the verge of closing all 23 of its locations in the state of Arkansas.
This comes after Gov. Sarah Huckabee Sanders signed a bill into law that takes aim at the overinflated prices seen at CVS and other similar pharmacies.
The law bans drug middlemen, called Pharmacy Benefits Managers (PBMs), from owning pharmacies in the state.
Take a look:
CVS closing all 23 pharmacy locations in Arkansas
Governor Sarah Huckabee Sanders signed into law House Bill 1150, ENDING the conflict interest of pharmacy benefits managers owning pharmacies
PBMs are who set the insane prices
Instead of complying CVS is leaving. This is HUGE! pic.twitter.com/1Ve3zXFeXO
— Wall Street Apes (@WallStreetApes) May 26, 2025
PBMs are notorious for jacking up the price of pharmaceutical drugs to patients.
Dr. Kat Lindley broke down the law and explained what exactly these PBMs do:
Arkansas law, HB 1150, restricts the ability of PBMs, like CVS Caremark, to own and operate pharmacies within the state.
CVS will close all its 23 pharmacies in Arkansas by a January 1, 2026. This decision is a direct result of a recently enacted state law that prohibits… pic.twitter.com/SUBD9Fqloa
— Dr. Kat Lindley (@KLVeritas) May 27, 2025
Arkansas law, HB 1150, restricts the ability of PBMs, like CVS Caremark, to own and operate pharmacies within the state.
CVS will close all its 23 pharmacies in Arkansas by a January 1, 2026. This decision is a direct result of a recently enacted state law that prohibits pharmacy benefit managers (PBMs) from owning pharmacies. CVS Health owns CVS Caremark (PBM), which operates the 23 CVS pharmacies in the state.
What are PBMs?
PBMs are companies that manage prescription drug benefits on behalf of health insurers, employers, and other payers. They act as intermediaries between insurers, pharmacies, and drug manufacturers to administer drug plans, control costs, and ensure access to medications. Downside of PBMs is lack of transparency, higher drug costs to the patients, restricted formularies, spread pricing, pharmacy squeeze and COI.
CVS has its own pharmacy benefits manager called Caremark Rx. This PBM, along with two others (owned by Cigna and United Healthcare) make up over 3/4 of prescription drug claims nationwide!
Newsweek noted:
CVS said that passing Act 624, as the bill became known, puts the services available to its customers at risk. Those who advocated for the move said they wanted to protect independent pharmacies and stop patients from being abused.
Sanders said in April that PBMs “take advantage of lax regulations to abuse customers” as she made Arkansas the first state to ban drug giants from owning pharmacies.
The governor and her Attorney General Tim Griffin said that PBMs had taken advantage of their position as price negotiators to benefit the pharmacies they owned and their shareholders, damaging independents in the process.
CVS told Newsweek that there were 14 more independent pharmacies operating in the state than there were in 2019, and that CVS Caremark reimburses them at a higher rate than its own pharmacies—at 61 percent.
The company said it believed Act 624 would shut pharmacies down and cut people off from health care once it comes into force January 1, 2026.
PBMs are the middlemen between drug companies, insurers, and the pharmacies themselves, negotiating on the supplies and prices of medications, affecting how much providers and patients pay.
One of the key issues with PBMs is a lack of transparency on how they operate, with no obligation for them to share details with insurance companies on the formulas they use to determine payment share.
Per the Center for American Progress (CAP), CVS Health accounted for a third of the PBM market in 2022, with Cigna and UnitedHealth taking up the next largest chunks at 24 and 22 percent respectfully.
Over the weekend, reports broke that in response to the new law, CVS was shutting down its presence in the state.
However, CVS now claims that they are still exploring “all available options to stay open” in Arkansas.
Still, they would have to majorly change their business model by early 2026 if they want to stay open in Arkansas.
Per The Northwest Arkansas Democrat Gazette:
Pharmacy giant CVS is “looking at all available options to stay open and continue to serve Arkansans” at its 23 locations across the state, according to a statement Saturday from a company spokesperson. It comes after Gov. Sarah Huckabee Sanders signed legislation last month that prevents drug middlemen from owning pharmacies in Arkansas.
The spokesperson declined to detail the options, but said a Saturday report by the Arkansas Democrat-Gazette was creating “angst and confusion for our Arkansas customers and colleagues.”
CVS has not officially announced plans to close all of its stores, but a recently passed law would require the company to close its 23 stores in the Natural State by the beginning of next year if it doesn’t change its business model.
CVS’s pharmacies in Arkansas serve more than 340,000 people, according to a company spokesperson.
This is a Guest Post from our friends over at WLTReport.