The pharmacies contend that each claim, in which ESI reimbursed the pharmacy below the published NADAC amount, constitutes a separate violation of Act 990.

On September 15, 2026, a dozen independent pharmacies in Arkansas filed a lawsuit against Express Scripts Inc. (ESI), a pharmacy benefit manager (PBM), alleging that it reimbursed the pharmacies for prescription claims below Arkansas’ required reimbursement floor as measured by the government benchmark, the National Average Drug Acquisition Cost (NADAC). The case is an early test of Arkansas Act 990, which expressly authorizes private enforcement of certain pharmacy reimbursement requirements and permits statutory damages of up to $10,000 per violation.

This lawsuit is pending in Missouri state court. The complaint alleges, in pertinent part, that ESI reimbursed the pharmacies below Arkansas’ statutory floor in connection with more than 40,000 claims submitted by the pharmacies to ESI for reimbursement from August 5, 2025, through March 31, 2026. The pharmacies contend that each claim, in which ESI reimbursed the pharmacy below the published NADAC amount, constitutes a separate violation of Act 990.

According to the complaint, ESI controls the pricing logic, maximum allowable cost lists, network rates, NADAC updates, adjustments and appeal workflows used to adjudicate the pharmacies’ claims for reimbursement for medication provided to an ESI member. The pharmacies assert:

• Recurring patterns: The challenged payments reflect recurring patterns across drugs, plans, pharmacies and dates, rather than isolated claim-processing errors;
• Data and NADAC files: ESI possessed the claim data and weekly federal NADAC files needed to apply Arkansas’ floor at the point of sale; and
• Regulations and FTC Settlement: ESI knew or should have known of the requirements, including via the February 2026 Federal Trade Commission (FTC) settlement and Arkansas’ regulatory bulletins and enforcement proceedings.

Prior Federal and State Actions

By way of background, in February 2026, the FTC secured a landmark settlement with ESI. In the underlying lawsuit, the FTC alleged, among other things, that ESI artificially inflated the list price of insulin drugs by using anticompetitive and unfair rebating practices and impaired patients’ access to lower list price products. The settlement requires ESI to increase the transparency of its business practices.

In August 2024, the Arkansas Insurance Department announced notices of penalties and hearings against four major PBMs, including ESI. These enforcement actions arose soon after the Insurance Department issued a bulletin advising PBMs to cease reimbursing Arkansas pharmacies below the published NADAC amounts, in violation of state law.

ESI’s Cost Shortfalls and Appeals Process

In the complaint, the pharmacies allege that they purchased and paid for medications before dispensing them. The pharmacies then transmitted claims data to ESI and dispensed prescriptions after receiving ESI’s real-time adjudication response. The pharmacies allege that they were forced to absorb ESI’s cost shortfalls because reversing claims or refusing to fill medications could delay that patient’s therapy, forcing the patient to utilize a competing pharmacy or constituting a technical breach of the pharmacy’s provider agreement with ESI.

The pharmacies further allege that ESI’s appeal process required that each pharmacy identify each and every alleged underpayment, submit and monitor appeals and reconcile later corrections. The pharmacies allege that the time and expense in following ESI’s appeal process, in order to pursue ESI’s compliance under Arkansas law, would often exceed the value of shortfalls for the reimbursement at issue.

The pharmacies also allege that, on June 23, 2026, they provided ESI written notice of the claims and offered to meet in good faith pursuant to the dispute-resolution provisions of ESI’s provider manual. The pharmacies allege that ESI did not comply with the manual by failing to respond to the notice or meeting request.

Causes of Action and Requested Relief

The pharmacies assert two causes of action against ESI.

First, the pharmacies alleged that ESI violated Arkansas Code Section 17-92-by: (1) reimbursing claims below the lawful reimbursement amount, including the NADAC floor incorporated through Section 23-92-506(b)(5)(A); (2) maintaining maximum allowable cost values and reimbursement methodologies inconsistent with statutory requirements; (3) failing to update or apply lawful reimbursement rates; and (4) failing to timely correct the erroneous reimbursement amounts. Act 990 amended Arkansas’ maximum allowable cost statute to confirm that a pharmacy, pharmacist or pharmacy-services business may bring a private action under specified Arkansas statutes. The pharmacies seek compensatory damages, statutory damages of up to $10,000 per violation, interest, attorneys fees and costs.

Second, the pharmacies seek declarations that: (1) contracts and pricing formulas cannot authorize reimbursement for fills to ESI members below the NADAC floor; (2) dispensing fees and other compensation cannot be reduced to conceal or offset a below-floor ingredient payment; (3) the challenged reimbursement practices violate Arkansas law; and (4) a later adjustment, by a PBM relating to a reimbursement amount previously provided, does not extinguish a violation by ESI of Arkansas law. The pharmacies also seek a reasonable appeal process that includes bulk appeals and invoice-based support.

Why This Matters for Pharmacies

Claims May Aggregate Rapidly

Even small shortfalls in reimbursement amounts can create substantial exposure when alleged across thousands of fills/claims for reimbursement.

PBM Data May Reveal Common Methods

Repeating patterns by drug, plan group or pricing logic may support allegations that underpayments arose from a uniform system rather than pharmacy-specific circumstances.

Operational Harm Is Legally Significant

Below-cost reimbursement can constrain inventory, staffing and patient capacity, especially for independent and rural pharmacies.

Regulatory Materials May Strengthen Private Claims

Bulletins, consent orders and prior enforcement actions can help frame applicable standards and establish a PBM’s notice of these standards.

Other States May Follow Arkansas’ Model

Pharmacies operating across multiple jurisdictions should monitor state-specific reimbursement floors, appeal rights, prompt-payment provisions, anti-clawback laws, network adequacy requirements and private remedies.

This case bears watching regarding the interaction between statutory and contractual remedies, the treatment of pharmacy appeals and state reimbursement regulation.

For pharmacies, Act 990 provides a potentially significant enforcement mechanism where claims data demonstrates repeated below-floor reimbursement. For PBMs and plan sponsors, the lawsuit underscores the need for defensible pricing systems and prompt correction processes. The outcome may influence similar disputes well beyond Arkansas.

For More Information

If you have any questions about this Alert, please contact Jonathan L. Swichar, Sheila Raftery Wiggins, Bradley A. Wasser, Nikki Baniewicz, any of the attorneys in our Pharmacy Litigation or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.