Explain It Like I’m 5 version
💊 Arkansas made a new rule (Rule 128) that says big pharmacy middlemen (PBMs) have to pay pharmacies fairly and can’t own the pharmacies they pay.
😤 CVS is both a pharmacy and a PBM (through CVS Caremark), and they don’t like this rule. They sued the state and said they might shut down their Arkansas pharmacies.
🧓 Lots of older people in Arkansas use SilverScript for their Medicare prescriptions.
SilverScript is an Aetna plan, but Aetna is owned by CVS, so CVS basically runs the pharmacy network for it.
💵 Over 40,000 Arkansans use this plan. Some are now getting letters saying their medicines might suddenly get way more expensive if CVS leaves the state.
💬 Lawmakers asked the Insurance Commissioner if these people would be stuck. He said maybe, but they’d probably get a chance to switch plans — though no one knows exactly what that would look like.
Deep Dive version
If you received an alarming letter from CVS about your prescription drug coverage, read on. The letter was among pharmacy-related topics discussed at the Nov. 21 Arkansas Legislative Council meeting.
Arkansas lawmakers pressed state insurance officials Friday over growing concerns that CVS’s announced withdrawal from Arkansas could leave thousands of Medicare retirees on SilverScript scrambling to afford their medications.
The issue surfaced when Sen. Terry Rice questioned the Arkansas Insurance Department (AID) about a letter a retired couple received from SilverScript — the state’s most popular Medicare Part D drug plan, administered by CVS.
Rice said the couple was warned that medications they currently get for $5 or $10 could jump to around $200 because CVS may no longer be available in their plan’s network after December.
How many Arkansans does this affect?
SilverScript is not a small plan. The state’s primary SilverScript plan — Aetna Medicare SilverScript Choice (S5601-038) — covers 40,577 Arkansans, according to the latest CMS enrollment data. Thousands more may be enrolled in SilverScript employer-group retiree plans, which aren’t reported in the same dataset.
So when beneficiaries start getting letters warning of possible network changes and rising prescription costs, the ripple effects could be felt across the state.
Is SilverScript Aetna or CVS? Answer: It’s both.
In 2018, CVS Health bought Aetna in a massive $69 billion acquisition.
So today:
- CVS Health is the parent company
- Aetna is their insurance arm
- CVS Caremark is their PBM (pharmacy benefit manager)
- SilverScript is their Medicare Part D prescription drug plan
But all of them now live under CVS Health.
So when CVS says it may close pharmacies in Arkansas, SilverScript members feel it immediately, even if the plan is labeled “Aetna.”
Why CVS is threatening to leave Arkansas
This all stems from Act 624 of 2025 — the first law in the country to ban PBMs from owning or operating pharmacies in Arkansas. The law was designed to break up vertical integration between PBMs and pharmacy chains, a model dominated by CVS Caremark.
CVS responded by announcing plans to close more than 20 Arkansas pharmacies, arguing that the law would make its business model untenable. The state, meanwhile, implemented Rule 128, which requires PBMs to reimburse pharmacies at least at the cost of the drug (NADAC), plus a fair dispensing fee — another major shift affecting Caremark.
CVS then sued the state, and in July a federal judge issued a preliminary injunction, blocking the enforcement of Act 624 while litigation continues. That injection means closures haven’t happened yet, but CVS told Rice’s constituents, and likely many others, that network access could still change by year’s end.
“Is it possible they could go ahead and shut off depending on the judicial ruling?” Rice asked.
AID Commissioner Jimmy Harris replied: “It’s possible.”
Will retirees get a special enrollment window if CVS leaves?
Rice pressed Harris on whether retirees would have a chance to switch to another Part D plan if CVS is no longer an option.
“Yes, sir,” Harris said. “They would be given an opportunity… but I can’t tell you exactly what that something different would be.”
Why legislators are watching Rule 128 so closely
Beyond CVS, senators raised deeper concerns about PBM behavior under Rule 128, including:
- Large gaps between what national chains receive versus independents.
- The discovery of multiple PBMs operating without a valid state license.
- The need to license PSAOs, the entities that negotiate prices for small pharmacies.
Sen. Kim Hammer noted that AID’s initial data showed NADAC reimbursements “generally accurate” but warned of “significant variations beneath those averages.” Harris confirmed that national chains and independent pharmacies are reimbursed very differently, one of the exact issues Rule 128 was designed to fix.
AID committed to delivering a full report within three weeks, and lawmakers said they expect it to appear at the next ALC meeting.
Key Quotes
“I don’t think they’re necessarily pulling out. I think that was just a change that they’re making in their network. But when I get a response on that explanation, I’ll be sure and send that to you and we can talk about it.”
— Jimmy Harris, Arkansas Insurance Commissioner
