On April 16, 2025, Arkansas Gov. Sarah Huckabee Sanders signed into law HB 1531 — An Act to Prohibit Pharmaceutical Manufacturers From Restricting or Limiting Prescription Medications to a Limited Distribution Network of Out-of-State Pharmacies (the Act) — which limits pharmaceutical manufacturers’ ability to use limited distribution networks (LDNs) in Arkansas. The Act’s preamble states that the law is intended to respond to the “legislative finding” that “[t]he reasons for the limited distribution networks by pharmaceutical manufacturers are not often disclosed or may not operate with optimal patient safety and same day patient access in mind.”
The Act, which takes effect on September 1, 2026, states that a pharmaceutical manufacturer “that expects for their prescription medications to be eligible, considered for payment, and covered in a state government and public plan sponsor for health benefit plans ... [s]hall not restrict or limit prescription medications” of a new product to a “limited distribution network” more than three months after launch without having “similar access” and “allowing for upon request or application by [a] pharmacy,” at least
(i) “[a] local network of public institution academic medical center access”
(ii) “[g]eographic diversity of access within the state”
(iii) “[d]iverse access for local for-profit and nonprofit pharmacies in good standing” with the Arkansas Board of Pharmacy (the Board or BOP) and “that have experience or accreditation in managing expensive specialty or limited distribution medications”
(iv) access for a pharmacy that meets “medication specific ... Food and Drug Administration guidance or requirements”1
Notably, following industry opposition from pharmaceutical manufacturers, the initial draft of HB 1531 was amended to add language requiring Arkansas pharmacies that request or apply to participate in a manufacturer’s distribution network to meet certain Food and Drug Administration (FDA) requirements. The bill’s sponsor, Rep. Brandon Achor, stated that these revisions were intended to “give some clarity to [] manufacturers that they don’t have to prospectively recruit participants” but rather are required to “just review applications, which was the intent” and to provide manufacturers with the “FDA language they requested.”2
Under the Act, pharmaceutical manufacturers that intend to maintain “restricted networks” for six months or longer must present a request to the BOP that “explain[s] how the restriction will support and not hinder the mission of the [B]oard to promote, preserve, and protect the public health, safety, and welfare of citizens” of Arkansas.3
In evaluating a manufacturer’s request to use restricted networks, the Act instructs the Board to consider the following:
(i) “Costs”
(ii) “Logistics”
(iii) “Patient caseload”
(iv) “The rarity of the prescription drug that is used”
(v) “The rarity of the disease or condition”
(vi) “Any other factors unique and relevant to the medication and disease or condition treated”4
Even if the Board grants a manufacturer’s request for continued use of a “limited network,” manufacturers must still allow Arkansas pharmacies to apply to be part of the network. Specifically, a manufacturer must “allow some pharmacies in [Arkansas], upon request or application, to participate and access the medications to meet the needs of patients with same day access in this state without requiring patients to use out-of-state or in-state common mail carriers for access.”5
The Act imposes significant penalties on manufacturers who are noncompliant with the Act. Specifically, the Act states that a “state government and public plan sponsor for a health benefit plan shall not pay for prescription drugs” from noncompliant manufacturers and also subjects such manufacturers to a fine of $10,000 per day of noncompliance.6
Notably, the Act fails to define key terms throughout, including “limited distribution network,” “restricted network,” “similar access,” “geographic diversity,” and “diverse access.” There are also drafting errors that create additional ambiguity as to how the Act’s requirements should be interpreted. We expect that BOP regulations and/or subregulatory guidance will be issued to provide clarity on how the Act, the process for a pharmacy to “request” or submit an “application” to join an LDN, and the exception process will be implemented.
The Act is the latest effort by Arkansas to regulate access to pharmaceutical medications. In 2021, Arkansas passed a separate law that prohibits drug manufacturers from denying or prohibiting in Arkansas “340B drug pricing for an Arkansas-based community pharmacy that receives drugs purchased under a 340B drug pricing contract pharmacy arrangement with” a covered entity or prohibiting “a pharmacy from contracting” with a covered entity.7 Additionally, on the same day the Act was signed, Gov. Sanders signed Arkansas HB 1150, which expressly prohibits pharmacy benefit managers (PBMs), as well as any entity that is managed by, or is a subsidiary of, a PBM, from holding, directly or indirectly, a retail pharmacy permit under Arkansas law.
The authors of this article are not licensed to practice law in Arkansas.
1HB 1531(c)(1).
2Hearing on HB 1531 Before the H. Comm. on Ins. & Commerce, 95th Gen. Assemb., at 5:11:20 (Apr. 9, 2025) (statement of Rep. Brandon Achor, Member, H. Comm. on Ins. & Commerce).
3HB 1531(d)(1)(A).
4Id. (d)(2)(A).
5Id. (d)(2)(B).
6Id. (e), (f).
7Ark. Code. Ann. § 23-92-604(c)(1)–(2).
