On Tuesday July 28, the Arkansas State Board of Pharmacy suspended enforcement of a 2025 Arkansas law, Act 630, two months after a federal court deemed the measure likely unconstitutional.
Act 630 purportedly aimed to “prevent pharmaceutical manufacturers from restricting prescription medication distribution to a limited network of pharmacies, particularly out-of-state pharmacies,” requiring them to include some Arkansas pharmacies into such networks approved by the state if such networks were maintained more than three months after launch. If companies did not comply, the law would impose a $10,000 per day noncompliance penalty and potentially could result in loss of Arkansas Medicaid coverage for all of the manufacturer’s drug products.
The Board of Pharmacy emphasized that its decision was based on the opinion from a federal court that Act 630 likely violates the U.S. Constitution’s prohibition on state laws that unduly restrict interstate commerce, as well as on advice from the Arkansas Attorney General’s Office that the law is unconstitutional and could not be successfully defended in future litigation.
But the issues with the law are not restricted to its unconstitutionality or to other potential conflicts with federal law that the court noted in its opinion. Act 630 also poses significant risks to patient safety as many of the drugs and treatments distributed in a limited distribution network are the subject of an FDA-required Risk Evaluation and Mitigation Strategy (REMS) or other special handling or safety protocols.
“Therapies are getting more complex because they’re treating more complex diseases,” explains Patrick Plues, Senior Vice President, State Government Affairs & Affiliate Relations at the Biotechnology Innovation Organization (BIO). “Many drug manufacturers became very concerned about the impact of this legislation on the ability of healthcare providers to effectively distribute and deliver these therapies to patients in a safe way.”
So what are industry concerns with Act 630 when it comes to patient safety?
Impacts on small, ultra-rare, or high-risk patient populations
“The main question that legislators had when considering the bill last year was basically: If we’re licensed pharmacists, why can’t we be included in the limited distribution networks?” recalls Russell Palk, Director of Government Affairs in the Southeast and Mid-Atlantic, for BIO. “The problem is that these networks often incorporate complex patient services and monitoring—meaning that these patient populations require healthcare providers with highly concentrated expertise to safely deliver and manage these medications.”
As BIO explained in its letter to the Arkansas State Board of Pharmacy last year, “many therapies placed in limited distribution require close monitoring of patients, including frequent dosage adjustments, patient education on administration (e.g. for injectable or infused therapies), monitoring for adverse events, and adherence support.”
Not maintaining these high standards of delivery and care could critically threaten a treatment’s efficacy and achieving the treatment’s intended clinical outcomes. In particular, BIO emphasized the adverse impact of Act 630 on “patient populations requiring complex or rare disease treatments that need specialized handling.”
Furthermore, the limited distribution networks are used for the distribution of drugs that require additional safeguards to prevent misuse or improper administration. To comply with an FDA-required REMS, some drugs may only be dispensed through certified pharmacies with REMS compliance procedures, properly trained staff, and systems to collect and report REMS-required data.
And that is not the only capacity issue that traditional pharmacies would face within the limited distribution system.
“Many medications require strict temperature control, specialized packaging, or other handling protocols to maintain their stability and effectiveness,” BIO writes. “Distributing these drugs through a select network of pharmacies and distributors helps ensure that storage conditions meet necessary safety standards, preventing potential loss of efficacy or potential harm to patients.”
Protecting access
“Though it might feel a bit counterintuitive,” Palk continues, “limited distribution networks have an incredibly important role in protecting access to these complex treatments.”
When it comes to therapies for complex patient populations, it simply is not a scalable practice for traditional pharmacies to maintain access—in fact, it would be a major drive towards inventory uncertainty.
“Open access would strain inventory levels, raise risks of drug shortages, negatively impact inventory stability, and undermine business continuity and emergency response plans,” BIO writes. “Moreover, pharmacies with one or a small number of patients are unlikely to need full case quantities, yet their case orders will divert inventory from other patients in need and lead to excess carrying costs and significant product waste, as the drugs have limited shelf lives and will expire without being used.”
In reality, Act 630’s “same day access” requirement would add significant cost and inefficiency to the entire healthcare system in Arkansas.
Issues with patient access don’t just start behind the pharmacy counter, there are issues when it comes to distribution logistics as well.
For drugs and treatments that require specialized storage, delivery, and management, limited networks of delivery do more to guarantee access at a given location rather than risk it.
“Selected pharmacies have stock on hand and therefore don’t need to order upon receipt of a patient’s script,” writes BIO. “For patients who may live far from specialty medical centers or have difficulty traveling, limited distribution networks often include direct-to-patient shipping options.”
Finally, the limited distribution system also helps to prevent counterfeit or substandard products from entering the supply chain—a priority that is especially important to maintain when working with high-risk rare disease patients as expanding distribution indiscriminately increases the chances of supply chain disruptions, contamination, or improper handling.
“Ultimately, we have to make sure Arkansas considers legislation that works with patient needs in mind and complies with federal law,” says Palk. “A little extra time and consideration goes a long way as we work to increase access and lower barriers to medications for patients everywhere.”
