A significant federal judicial ruling has temporarily halted a controversial new Arkansas law, Act 624, which threatened to compel the closure of the state’s 23 CVS Pharmacy locations, among other pharmacy benefit manager (PBM)-owned retail operations. This preliminary injunction, issued by U.S. District Judge Brian Miller, marks a critical development in a case with wide-ranging implications for business, state legislative power, and healthcare access within the state.
A preliminary injunction serves as a judicial directive to pause the enforcement of a law until the full merits of the case can be heard and decided. Judge Miller’s decision to issue this injunction underscores his assessment that CVS and its co-plaintiffs possess a strong likelihood of succeeding in their legal challenge against the state, indicating potential constitutional infirmities within the newly enacted legislation.
The pharmaceutical market is significantly influenced by a few dominant players, with the four largest PBMs controlling approximately 70 percent of the market share, CVS being the foremost among them. As a major PBM, CVS not only operates its own retail pharmacies but also plays a crucial role in reimbursing both its internal pharmacy network and its national and local competitors, highlighting its central position in the pharmaceutical supply chain.
Act 624, which explicitly prohibited PBMs from operating retail pharmacies in Arkansas, garnered substantial bipartisan support among state lawmakers, passing with overwhelming majorities of 89-4 in the House and 26-9 in the Senate. Governor Sarah Huckabee Sanders and Attorney General Tim Griffin publicly supported the bill, which was slated to take effect on January 1, 2026, mandating the closure of all CVS pharmacies and other PBM-owned retail outlets by that date.
In his meticulously reasoned decision, Judge Miller characterized a preliminary injunction as an “extraordinary remedy,” to be granted only when the requesting party can demonstrate a high probability of prevailing in the underlying case. He specifically noted that Act 624 appears to infringe upon the U.S. Constitution’s Commerce Clause, which grants Congress the authority to regulate interstate commerce and ensure unhindered trade among states, thus preventing states from enacting discriminatory laws.
This constitutional principle, particularly the Dormant Commerce Clause, functions as a safeguard against state actions that might impede or discriminate against interstate commerce. For instance, it would prohibit Arkansas from imposing a special tax on Texas-made Blue Bell ice cream to unfairly benefit a local producer like Yarnell’s, or prevent Texas from retaliating by inflating the price of Arkansas-grown rice, ensuring a level economic playing field.
Furthermore, Judge Miller’s ruling cited Act 624’s likely violation of the Constitution’s Supremacy Clause, specifically as it pertains to the TRICARE military health insurance program. This clause establishes that the Constitution and federal laws supersede state laws when there is a conflict. Given that TRICARE has existing contracts with some of the plaintiffs to provide services, the federal government’s directive for these services cannot be nullified by state legislative action.
It is crucial to emphasize that this is a preliminary injunction, meaning the legal battle is far from over. The case will proceed to a full hearing, during which the attorney general’s office will present its counter-arguments and defenses against the judge’s initial findings. The ultimate outcome of this legal challenge remains to be determined.
For the present, however, the implementation of Act 624 is on hold. This allows CVS to continue its operations in Arkansas, maintaining its role in reimbursing both its own pharmacies and its competitors, ensuring continuity of service for residents across the state.
