Senate committee advances PBM licensure changes to bar ghost networks, restrict affiliate steering

Sen. Clint Penzo called Senate Bill 104 the companion to SB103 and said it closes loopholes in the states PBM licensure law. The sponsor told the committee the bill has several components: a prohibition on "ghost" pharmacy networks, limits on steering patients to PBM-affiliated pharmacies as the only contract option, requirements for accurate pharmacy directories, and protections around disclosure of protected health information to affiliate pharmacies.

Penzo said the bill also addresses patient accommodation processes, requiring PBMs to evaluate reasonable medical exceptions to mandatory mail-order dispensing when circumstances such as complex therapies, storage/temperature concerns, or lack of home support would make mail-order inappropriate. "If the provider has concerns that shipping this medication, may not make it there, may not be stored correctly, that is a concern that should be evaluated," he said.

Penzo described a range of examples: patients given letters listing alternative pharmacies that were closed, patients who received unwanted phone calls from affiliate pharmacies after a PBM rejected a script, and a serious case he said involved a homebound oncology patient who could not obtain an in-person fill and later died.

Phil Cristinelli for the Pharmaceutical Care Management Association again testified against the bill, reiterating concerns about vague standards such as "reasonable and relevant" and arguing the measure could create duplication of enforcement between the Insurance Department and the Attorney General. He said Arkansas already has pharmacy network adequacy rules and that some provisions are redundant.

Support came from a range of providers and associations who urged protections for patient access and safety. The sponsor indicated willingness to take technical changes.

Committee action: After discussion, Sen. Penzo moved to pass the bill; Sen. Johnson seconded. The committee approved the bill by voice vote; no roll-call tally was provided on the record.

Why it matters: SB104 would give the Insurance Department new enforcement tools tied to PBM licensure and seeks to address a set of practices advocates say limit Arkansansaccess to local pharmacies for specialty medicines and potentially expose patients to delivery or storage risks.

Key factual details

- Sponsor: Sen. Clint Penzo (District 31). - Major supporters: Arkansas Hospital Association, UAMS brain-injury and rehab stakeholders, community pharmacies and specialty pharmacy advocates. - Major opponent: Pharmaceutical Care Management Association (national PBM trade association). - Notable provisions: prohibition on ghost networks; prohibition on requiring use of a single affiliate pharmacy as the only option; requirement that PBMs consider clinical, storage, and socioeconomic exceptions before forcing mail-order; disclosure limits for PHI to affiliates. - Outcome: Committee approved SB104 for passage by voice vote (motion by Penzo; second by Johnson).

Provenance: Committee discussion on the bill began around transcript block ~3653.32 seconds (sponsor introduction) and the committee vote occurred at ~4393.87 seconds.