The lead plaintiffs in the key lawsuits are some of the largest actors in the pharmacy and PBM industries: Express Scripts Inc., Optum Inc., CVS Pharmacy Inc. and the Pharmaceutical Care Management Association.
On July 28, 2025, the United States District Court for the Eastern District of Arkansas issued an order preliminarily enjoining enforcement of Arkansas' Act 624, a recently enacted, first-of-its-kind law that would prohibit pharmacy benefits managers (PBMs) from owning or operating pharmacies in Arkansas, effective January 1, 2026.
Act 624 was enacted based on growing concern that “vertical integration [by PBMs has] transformed PBMs from useful administrative service providers into market-dominating behemoths that control the industry.” For instance, through years of horizontal consolidation, the three largest PBMs—CVS Caremark, Express Scripts and OptumRx—now “process 80% of the nation’s prescriptions and bring in 70% of specialty drug revenue.” At the same time, the top six PBMs have vertically integrated downstream by acquiring and operating their own affiliated pharmacies. Id.
Majority of Claims Likely to Fail
The order holds that although the plaintiffs are likely to fail on six of their eight claims, their likelihood of success on the remaining two claims—based on the preliminary evidence and law before the court—is high enough to warrant pausing enforcement of Act 624 pending the outcome of the suit. Thus, this case will now move to litigation, where the court will be able to assess the PBM act based on evidence gathered during discovery and further arguments brought by the parties.
This order follows a series of lawsuits challenging Act 624, which was passed into law on April 16, 2025. The lead plaintiffs in the key lawsuits are some of the largest actors in the pharmacy and PBM industries: Express Scripts Inc. (a PBM owned by health insurer Cigna Healthcare), Optum Inc. (a PBM owed by health insurer UnitedHealth Group), CVS Pharmacy Inc. and the Pharmaceutical Care Management Association. Their cases were eventually consolidated into Express Scripts, Inc. v. Richmond, so the court’s order was a response to the combined legal efforts of these parties, including multiple complaints and motions for a preliminary injunction. Together, those pleadings raise eight challenges to the PBM act, arguing that it violates the U.S. Constitution’s privileges and immunities clause, bill of attainder clause, takings clause, equal protection clause, commerce clause and supremacy clause—the last of which plaintiffs argue Act 624 violates as it is preempted by TRICARE, Medicare and the Employee Retirement Income Security Act of 1974 (ERISA).
Two Claims Have a Chance of Success
The order assesses each of these legal challenges and concludes that all but two of the challenges (the commerce clause and supremacy clause challenges) are likely to fail at trial.
The Commerce Clause Challenge
The court’s reasoning rested on the dormant commerce clause doctrine, which states that because the Constitution grants Congress the power to regulate interstate commerce, states may not unjustifiably discriminate against interstate commerce. The court opined that because Arkansas already has laws in place regulating PBM reimbursement and prohibiting certain PBM business tactics, the breadth of Act 624 is unjustifiable.
The Supremacy Clause Challenge
The court held that because the TRICARE program already has contracts with PBM-owned pharmacies in Arkansas, and because Act 624 would give Arkansas power over TRICARE’s future in-state contracts, Act 624 would conflict with the TRICARE statute. Since federal laws preempt state laws, the court said that TRICARE therefore preempts Act 624.
Conclusion
Although this order likely postpones Act 624’s effective date, a preliminary injunction is just that: preliminary. The court’s reasoning for the commerce clause and supremacy clause challenges rests entirely on a preliminary assessment of existing law. But since those challenges are now moving to litigation, both parties must now present evidence for their claims, along with additional legal arguments, which will inform the final decision on Act 624 at trial. Further, the court’s reasoning for one of the challenges is a constitutional doctrine (that of the dormant commerce clause) that has been expressly rejected by several recent U.S. Supreme Court justices. This could affect the success of any appeal of this case. Thus, although the order pauses Act 624’s enforcement, the order is temporary, and the full merits of the case—and of Act 624’s legality—have yet to be assessed.
Duane Morris attorneys will continue to monitor developments in this case and other related issues and report on the key details for the industry in subsequent Alerts.
For More Information
If you have any questions about this Alert, please contact Jonathan L. Swichar, Bradley A. Wasser, Taylor Hertzler, any of the attorneys in our Pharmacy Litigation Group or the attorney in the firm with whom you are regularly in contact.
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