By Diana Novak Jones
CHICAGO (Reuters) -Express Scripts and several of its affiliated pharmacies filed a lawsuit on Thursday asking an Arkansas federal judge to overturn a state law set to go into effect next year that would ban pharmacy benefit managers from owning pharmacies.
The lawsuit, filed in the U.S. District Court for the Eastern District of Arkansas, says the law puts an unconstitutional restriction on interstate commerce by burdening out-of-state companies like Express Scripts, which is based in St. Louis.
Express, one of the nation’s largest pharmacy benefit managers, seeks a declaration that the law is unconstitutional and an order barring its enforcement.
Sam Dubke, a spokesperson for Arkansas Governor Sara Huckabee Sanders, who signed the law in April, said in a statement, “these big drug middlemen are only attacking Arkansas in the courts because they’re worried other states will join Governor Sanders in fighting for patient access and affordable prescriptions.”
The lawsuit names the members of the Arkansas State Board of Pharmacy, which regulates the state’s pharmacies.
In a statement, Express Scripts, which is a unit of the Cigna Group, said the law will likely force it to close some retail pharmacies and bar it from mailing prescriptions to thousands of Arkansas residents through its mail-order pharmacy business.
“While Arkansas politicians claim this law was designed to lower drug prices and increase access to medications, it will do just the opposite,” said Andrea Nelson, Cigna’s chief legal officer.
Pharmacy benefit managers serve as intermediaries, negotiating prescription drug prices with drugmakers on behalf of employers and health plans. They also often manage pharmacy networks and operate mail-order pharmacies.
Arkansas’ law, which is set to go into effect in January, bars PBMs from receiving permits to dispense prescription medication and revokes PBMs’ existing permits, according to the legislation.
The law is meant to cut down on anticompetitive behavior by the PBMs, which set the prices for the drugs they dispense through their pharmacies, according to the governor’s office.
Their business practices have drawn increasing scrutiny in recent years from U.S. lawmakers looking to lower drug prices, and from the Federal Trade Commission, which accused the three largest PBMs of driving up the cost of insulin drugs.
(Additional reporting by Amina Niasse in New York; Editing by Leigh Jones and Bill Berkrot)
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