State Legislative Trends Restricting PBM Ownership of Pharmacies

Following Arkansas’s efforts last year, several states are considering or advancing proposals that would restrict or prohibit pharmacy benefit managers (PBMs) and affiliated entities from owning or controlling pharmacies. While the proposals vary in structure and timing, each reflects ongoing state‑level interest in limiting PBM pharmacy ownership, with some measures drawing from aspects of the Arkansas approach.

Arkansas enacted Act 624 to prohibit PBMs from owning or operating pharmacies in the state (see our summary here) but enforcement of the law currently stayed. In a July 28, 2025 order, U.S. District Judge Brian Miller granted a preliminary injunction in favor of several major PBMs and affiliated entities, temporarily blocking implementation of Act 624 pending final resolution of the litigation. Regardless, the states below have filed bills with similar restrictions, perhaps with the goal of having these laws on the books in the event Arkansas prevails.

Arizona. The Arizona Senate is considering legislation that would prohibit PBMs from owning or holding, directly or indirectly, pharmacy permits in the state. SB 1545 defines “PBM” broadly to include PBM subsidiaries, entities managed by PBMs, and entities with direct or indirect ownership interests in PBMs. Enforcement would be assigned to the Arizona State Board of Pharmacy (the Board), which would be required to revoke or refuse to renew noncompliant permits and oversee a transition and notice framework.

The bill includes limited exceptions intended to preserve patient access. The Board may convert an existing permit to a limited‑service pharmacy permit to allow continued dispensing of rare, orphan, or limited‑distribution drugs, and may temporarily extend permits where critical patient services are provided and a sale to an eligible buyer is pending. Employer‑sponsored pharmacies serving only employees and dependents are excluded under specified conditions.

If enacted, the Board would review existing permits as of July 1, 2026 and notify affected pharmacies at least 90 days before January 1, 2027. At least 60 days before January 1, 2027, affected pharmacies would be required to notify each patient—and each prescribing health care provider that has used the pharmacy within the prior 12 months—that the pharmacy will no longer be able to dispense to the patient on or after January 1, 2027.

Tennessee. HB 1959 / SB 2040 would prohibit a PBM from directly or indirectly acquiring, holding, controlling, or otherwise possessing any ownership or beneficial interest in a pharmacy license, or from exercising control over a licensed pharmacy. The bills also prohibit entities from using corporate structuring, intermediary ownership, management agreements, leases, or other indirect arrangements to circumvent the prohibition. The restrictions likely apply to both resident and non‑resident pharmacies.

Oklahoma. HB 4457 would establish a new regulatory framework for PBMs by prohibiting PBMs and their directly or indirectly affiliated entities from holding pharmacy licenses to sell retail drugs in Oklahoma. The bill authorizes the Oklahoma Board of Pharmacy to enforce the prohibition through license nonrenewal or revocation.

The legislation includes a temporary exception permitting limited‑use licenses for pharmacies dispensing rare, orphan, or limited‑distribution drugs through September 1, 2028, and allows extensions or renewals in limited circumstances, including pending sales to eligible buyers. It also establishes notice requirements for affected pharmacies and patients. If enacted, the effective date would be November 1, 2026.

Quarles will be following this legislation and the Arkansas litigation closely. If you have any questions, please reach out to your Quarles attorney or:

• Susan Brichler Trujillo: (602) 229-5318 / susan.trujillo@quarles.com
• Nick Meza: (602) 229-5439 / nicholas.meza@quarles.com
• Katie Lavigne: (612) 224-3759 / katie.lavigne@quarles.com