In a bold regulatory push with national implications, Arkansas Governor Sarah Huckabee Sanders has taken the lead in challenging the dominance of major U.S. pharmacy benefit managers (PBMs), aiming to break their grip on the pharmaceutical supply chain.
Earlier this year, Sanders signed legislation barring health insurance giants Cigna, CVS, and UnitedHealth — which collectively control the country’s three largest PBMs — from owning and operating retail pharmacies within Arkansas. The move targets what she and other critics call a deeply flawed system where PBMs, acting as intermediaries between drug manufacturers and consumers, allegedly inflate costs and diminish access to life-saving medications.
Legal Pushback from Industry Giants
In May, the targeted companies responded by filing a lawsuit in U.S. District Court, arguing that the Arkansas law was unconstitutional. On Monday, a federal judge sided with the companies, issuing a preliminary injunction preventing the law from taking effect.
Despite the legal setback, the Arkansas case is being watched closely by other states and federal regulators. Healthcare watchdogs and political figures have echoed concerns that vertically integrated healthcare companies — which both insure patients and control the flow of pharmaceuticals — create conflicts of interest that disadvantage consumers.
“If Arkansas prevails, I think a lot of states will follow suit,” said Benjamin Jolley, a Utah-based pharmacist and fellow at the American Economic Liberties Project. Conversely, a loss could drive renewed pressure on Congress to legislate at the federal level.
Governor Sanders: “Consumers Are Losing Out”
In an interview with the Financial Times, Sanders justified the law, citing cases where patients in Arkansas struggled to access necessary medications — a potentially life-threatening issue. She emphasized that integrated PBM-insurer structures grant companies disproportionate control over drug pricing negotiations.
“When they get to own both sides of the negotiation then the consumers are the ones who lose,” Sanders stated. “PBMs have shown they care more about their bottom line and less about the people they are supposed to serve.”
Industry Response and Broader Legal Challenges
The targeted companies have pushed back strongly. CVS called the law “misguided” and expressed satisfaction with the court’s ruling. Cigna warned of potential disruptions to care for hundreds of thousands of patients. UnitedHealth declined to comment.
Beyond Arkansas, CVS faced criticism in Louisiana after it was accused of using customer contact data to lobby against similar state-level legislation — a bill that ultimately failed in the state senate.
Meanwhile, federal scrutiny continues. The Biden administration’s Federal Trade Commission (FTC) has launched lawsuits against PBMs for allegedly manipulating insulin prices. A January 2025 FTC report found that the major PBMs marked up some medications by several thousand percent.
UnitedHealth is also under a separate criminal investigation by the U.S. Department of Justice related to its billing practices under Medicare.
Implications for U.S. Healthcare
The financial impact on the companies varies. CVS and Cigna shares have risen 35% and 7% respectively this year, while UnitedHealth’s stock has fallen 44% amid mounting legal challenges.
According to Gregory Rosen, a former Justice Department official now with Rogers Joseph O’Donnell law firm, increased regulatory attention is inevitable. “The sheer volume of business these companies are doing increases the likelihood of regulatory interest,” he said, pointing to a wider trend of intensified scrutiny on corporate healthcare practices.
As the legal and political battles unfold, Arkansas’s campaign may mark a turning point in the fight to reform how Americans access and pay for medications — a system long criticized for its complexity, lack of transparency, and escalating costs.
