Arkansas doctor urges law to stop PBMs from excluding local pharmacies; sponsor pulls bill for edits

Sen. Clint Penzo opened discussion of Senate Bill 103, saying the measure aims to "expand access to care" by updating Arkansasany-willing-provider rules so pharmacies that meet a networkproviders terms cannot be arbitrarily excluded from PBM specialty networks.

Simon David (Highlands Oncology Group) testified as an oncology provider that writes multiple prescriptions per patient and described patients who cannot access medicines when local pharmacies are excluded from specialty networks. "If we don't expand access to care, no matter how many pharmacies that we have in the state, If they can't join the networks that the PBMs control, patients cannot get their medications," he said.

David told the committee that PBMs often create carve-out specialty networks that include only the PBM-owned mail-order pharmacy, forcing prescriptions out of state and creating delivery failures and lost opportunities for pharmacist counseling. "These networks only have 1 option customarily, and that is the mail order pharmacy owned by the PBM company," he said.

He described the bill as clarifying that PBMs "cannot arbitrarily exclude pharmacies that qualify" and that contractual terms must be "reasonable and relevant," language he said was taken from federal Centers for Medicare & Medicaid Services rules governing Medicare Advantage plans. David said the bill carries no fiscal impact for the largest public plans and aims chiefly to restore patientschoice of pharmacy.

Committee members asked technical questions about how PBMs and plans interact. David described PBM vertical integration and said some PBMs own pharmacies and sometimes insurers and PBMs are part of the same corporate family. He said federal rules that apply to Medicare reduce the exclusions that frustrate non-Medicare patients.

Phil Cristinelli, senior director of state affairs for the Pharmaceutical Care Management Association (PCMA), testified in opposition, arguing the billas draftedwould give the Arkansas Insurance Department an "unprecedented level of authority" to second-guess contract terms and to apply vague standards such as "reasonable, relevant, arbitrary, discriminatory." "The terms and conditions that are placed in these contracts tend to focus around patient health and safety. And they aren't arbitrary," Cristinelli told the committee.

Committee members raised accreditation and safety concerns and asked whether the bill should name specific accreditation standards. Jody Entred, executive vice president of the Arkansas Hospital Association, said hospitals support the bill but urged language to preserve high accreditation standards for specialty drugs to avoid reducing patient safety.

Sponsor Penzo agreed to take additional language and amendments to clarify accreditation and other points. At the end of the discussion the sponsor said he would "pull this 1 down for now, discuss the language," indicating the bill would be revised and returned to committee.

Why it matters: Committee testimony centered on whether PBMs' network design can limit Arkansans' ability to pick a local pharmacy for specialty medicines, and on whether state regulators should be empowered to review PBM contracting practices. The discussion included patient-safety, nondisclosure agreements, and how federal Medicare rules already impose some network standards for Medicare Advantage plans.

Key factual details

- Sponsor: Sen. Clint Penzo (District 31). - Testimony in favor: Simon David, Highlands Oncology Group (oncology provider). - Testimony opposed: Phil Cristinelli, Pharmaceutical Care Management Association (national PBM trade group). - Regulatory reference: Testimony cites federal CMS language used in Medicare Advantage rules and Arkansasany-willing-provider law; a speaker also referenced a "supreme court ruling from April 2003" in general terms. - Outcome: Sponsor withdrew the bill from consideration to allow drafting changes and to consider suggested accreditation language.

Provenance: Testimony and Q&A began with Simon David at the transcript block starting ~109.5 seconds and continued through the committee discussion and the sponsors decision to pull the bill around the block starting ~3424.78 seconds.