Penalties total nearly $1.5 million

LITTLE ROCK, AR - On August 6, 2024, Governor Sarah Huckabee Sanders and Arkansas Insurance Department Commissioner Alan McClain, announced notices of penalties and hearings against four major pharmacy benefit managers (PBMs), Caremark, Magellan, Express Scripts, and MedImpact.

These enforcement actions follow on the heels of a June 28, 2024, bulletin issued by the Insurance Department advising PBMs to cease paying Arkansas pharmacies below the national average drug acquisition cost (NADAC), in violation of state law. The Department is seeking a $5,000 fine for each payment made below NADAC pricing. PBM Caremark is alleged to have committed approximately 217 violations, Magellan, 50 alleged violations, and Express Scripts, 19 alleged violations. This is the largest pharmaceutical enforcement action in Arkansas history, totaling $1.47 million in possible penalties.

“PBMs have been allowed to skirt the law for too long, today 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 today by the Insurance Department and Commissioner McClain sends a message that Arkansas will protect seniors and rural pharmacies from PBMs taking advantage of them.”

“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 statues that violate state law, no matter the amount,” said Arkansas Insurance Commissioner, Alan McClain.”