Arkansas Insurance Department Issues First PBM Licenses
The Arkansas Insurance Commissioner approved two licenses for pharmacy benefits managers (PBMs), under the guise of a new law passed in a 2018 special session.
AID Commissioner Allen Kerr approved a PBM license for Aetna Health Management, LLC based in Hartford, Connecticut. The company does business in Arkansas as Aetna Pharmacy Management and is registered as a Foreign Limited Liability Company with the Secretary of State.
A license was also granted to CaremarkPCS Health, L.L.C. of Scottsdale, Arizona, which does business in Arkansas as CVS Caremark and is registered as a Foreign Limited Liability Company.
Kerr also granted a 60-day conditional license to OptumRX effective January 1 pending the Department’s completion of the company’s license application.
“Thanks to the hard work of Arkansas Insurance Department staff, we are able to issue these first licenses for pharmacy benefit managers following the passage of the new law in March. This law protects Arkansas consumers and has sparked a nationwide conversation on how other states can help their citizens have continued access to needed prescriptions and information on cheaper pharmaceuticals,” Kerr said.
The new review and licensure process was instigated last year after a major controversy erupted involving significantly higher drug prices that Arkansas pharmacies said were driving them out of business.
The new law allowed the Arkansas Insurance Department to license and regulate pharmacy benefit managers (PBMs), which negotiate rates, make payments, and act as middlemen between insurance companies and pharmacies.
It allows the insurance commissioner to review and approve PBMs’ compensation programs to ensure pharmacists’ reimbursements are “fair and reasonable.” PBMs must maintain a “reasonably adequate and accessible” network that does not include mail-order pharmacies.
PBMs cannot reimburse other pharmacists less than they reimburse their own affiliates. For example, CVS Health operates CVS Caremark and the CVS drugstore chain. The commissioner would have the authority to create other rules.