CVS tells customers it will be forced to close its doors in Louisiana because of HB 358, lawmakers call bluff

BATON ROUGE, La. (WAFB) – On June 11, many CVS customers woke up to a text from the pharmacy chain that said it would have to close its locations in Louisiana because of HB 358, which passed both the House and Senate. That bill would force CVS Health to stop operating CVS Caremark, alongside other pharmacies that own Pharmaceutical Benefit Managers (PBMs) in Louisiana.

“If you choose to be a PBM, you can still be a PBM but you cannot be a PBM and a pharmacy,” Rep. Dustin Miller proclaimed on the House floor. His bill would do just that, separating what he says is a conflict of interest in the pharmaceutical industry.

A PBM is essentially a middleman between pharmacies, insurance companies, and drug manufacturers that works to set drug prices. PBMs make their profits by spread pricing, or through the difference between what they bill insurance companies and the rebate to the pharmacy.

Oftentimes, these PBMs are owned by the pharmacies that they work with, even though they work across the industry. Lawmakers allege this drives business away from independent pharmacies and strangles small business.

“They set the rates and the reimbursement for the pharmacies; we are just telling them if that is your core responsibility, you can keep that as your core responsibility,” Miller said. “We don’t want you to also go open a pharmacy and steer people to you and compete against other pharmacies.”

Many House lawmakers took to the floor to call out CVS for what they said are scare tactics. The text and emails claimed sent by CVS claimed lawmakers were trying to get CVS to shut down its businesses.

“No, we’re not you liars,” Baton Rouge Republican Rep. Dixon McMakin said. “Quit being liars, quit using scare tactics.”

But Rep. Edmond Jordan said everyone needs to take a chill pill.

“Independent pharmacies aren’t going to close tomorrow, in fact, they are doing better than they have in several years,” Jordan said. “If CVS decides to leave, hopefully, we have people there to make up that difference.”

House Bill 358 now heads to the governor’s desk for final signature. Governor Landry has said online that he supports the new regulations.

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