Federal Judge Grant Preliminary Injunction in Arkansas PBM Law Case

Last month, we wrote about the CVS, Express Scripts, and Pharmaceutical Care Management Association (PCMA) lawsuit challenging Arkansas Act 624—a law prohibiting pharmacy benefit managers (PBMs) from owning or operating pharmacies in Arkansas. At the end of July, a federal district court judge granted the plaintiffs’ request for a preliminary injunction, blocking the law from taking effect until a final disposition in the case has been made.

Arkansas Act 624

The Act, the first of its kind, was set to go into effect on January 1, 2026. However, the plaintiffs alleged that Arkansas Act 624 is unconstitutional and violates the Commerce Clause and other provisions. They asked the court to issue a preliminary injunction blocking the law. After hearing arguments from both parties, the district court judge issued a 17-page opinion.

Court Sides With Plaintiffs

“A preliminary injunction is an extraordinary remedy,” noted the judge. “A party seeking a preliminary injunction must prove that: (1) there is a likelihood of success on the merits; (2) it will suffer irreparable harm if the injunction is denied; (3) the harm to the movant, if the injunction is denied, outweighs the harm to the non-movant if the injunction is granted; and (4) an injunction is in the public’s interest.”

To determine whether to issue a preliminary injunction, the judge considered the plaintiffs’ likelihood of success on the merits of their argument. The plaintiffs made many different arguments as to why they believed the law was unconstitutional. While the judge rejected the bulk of these arguments, he ultimately agreed that the plaintiffs were likely to prevail on 2 claims—one involving the Commerce Clause and the other involving a Supremacy Clause claim related to TRICARE preemption.

The Commerce Clause

The Commerce Clause seeks to ensure free trade among the states. The negative implication of this, known as the dormant Commerce Clause, prohibits states from unjustifiably discriminating against interstate commerce. “Act 624 appears to overtly discriminate against plaintiffs as out of state companies and the state has failed to show that it has no other means to advance its interest,” wrote the judge. “This is true because section one of Act 624 specifically states that its purpose is to eliminate plaintiffs’ “business tactics that have driven locally-operated pharmacies out of business.”

The Supremacy Clause

The Supremacy Clause provides “that the Constitution and the laws passed pursuant to it are the supreme laws of the land, binding alike upon states, courts, and the people, ‘anything in the Constitution or Laws of any State to the contrary notwithstanding.’” The purpose is to prevent confusion and conflicts between state and federal law. Thus, state laws that interfere with or contradict federal law are invalid. The plaintiffs argued that Act 624 interferes with and contradicts 3 federal laws: (1) TRICARE (health insurance for service members), (2) the Employee Retirement Income Security Act (ERISA), and (3) Medicare. While the judge rejected the ERISA and Medicare arguments, he agreed that Act 624 is explicitly and impliedly preempted by TRICARE.

“TRICARE contains an express preemption clause that overrides any ‘law or regulation of a State or local government relating to health insurance, prepaid health plans, or other health care delivery or financing methods’ that is ‘inconsistent with’ or ‘necessary to implement or administer’ the TRICARE program,” wrote the judge.

The judge granted the preliminary injunction, and Arkansas Act 624 is currently blocked from taking effect until the case is ultimately decided.

Reference

Express Scripts, Inc, et al v Rodney Richmond, et al. No 4:25-CV-00520-BSM. United States District Court for the Eastern District of Arkansas Central Division; 2025. https://arkansasadvocate.com/wp-content/uploads/2025/07/Act-624-preliminary-injunction.pdf