Little Rock, Arkansas – Governor Sarah Huckabee Sanders, along with Arkansas Insurance Department Commissioner Alan McClain, has announced significant enforcement actions against four major pharmacy benefit managers (PBMs): Caremark, Magellan, Express Scripts, and MedImpact. These actions come after a June 28, 2024, bulletin from the Insurance Department directed PBMs to stop paying Arkansas pharmacies below the national average drug acquisition cost (NADAC), a practice that violates state law.
The Arkansas Insurance Department is seeking a $5,000 fine for each instance of payment below NADAC pricing. According to the Department, Caremark is alleged to have committed approximately 217 violations, Magellan 50 violations, and Express Scripts 19 violations. The total potential penalties amount to $1.47 million, making this the largest pharmaceutical enforcement action in Arkansas history.
Holding Big Pharma Accountable
Governor Sanders emphasized the importance of this action in protecting vulnerable populations and ensuring fair practices in the pharmaceutical industry. “PBMs have been allowed to skirt the law for too long. My administration is taking an important step to holding Big Pharma accountable,” said Governor Sanders. “We must make sure that our most vulnerable populations are protected, and that starts with enforcing the law. This action by the Insurance Department and Commissioner McClain sends a message that Arkansas will protect seniors and rural pharmacies from PBMs taking advantage of them.”
Commitment to Fair Payments
Arkansas Insurance Commissioner Alan McClain reiterated the Department’s dedication to addressing PBM abuses and ensuring fair payments to pharmacies. “The Department is committed to tackling PBM abuses. It’s time for them to make fair and reasonable payments to our pharmacies, as required by the law, and we will enforce all elements of payment and PBM licensure statutes that violate state law, no matter the amount,” said Commissioner McClain.
These enforcement actions are a critical step in ensuring that PBMs comply with state laws and make fair payments to pharmacies. The hearings and penalties will serve as a strong deterrent against future violations and help maintain a fair and equitable pharmaceutical market in Arkansas.
