PBM reform: A closer look at state legislation.

Pharmacy Benefit Managers (PBMs) continue to face scrutiny for their opaque pricing practices and the role they play in driving up drug costs. These practices have long contributed to higher costs for members and employers, sparking demands for greater transparency and accountability. In response, Congress has taken action to ensure PBMs operate more transparently and fairly.

Recognizing the problem, states have followed Congress's lead in addressing the need for price transparency and tackling unsavory market practices. As of 2025, all 50 states have passed legislation to regulate PBMs. States have proposed and adopted legislative measures targeting licensing, pharmacy networks, PBM spread pricing, and plan design requirements. These measures aim to curb the tactics used by some of the largest PBMs to boost their profits at the expense of members and employers.

While the list of new laws and regulations continues to grow, below is a selection of notable state-level actions that reflect broader regulatory trends. (Note: This list is not exhaustive and may evolve as additional measures are introduced and passed.)

1. Arkansas House Bill 1150.

Signed into law on April 16, 2025, and set to take effect on January 1, 2026, HB 1150 introduces measures aimed at reducing conflicts of interest and fostering fair competition within the pharmacy marketplace. Key provisions include:

• Prohibiting PBM-owned pharmacies: The bill bans PBMs from owning or operating pharmacies within Arkansas. This move is designed to eliminate the potential for self-dealing and ensure a more level playing field for independent and community pharmacies.

• Promoting market fairness: By preventing vertical integration between PBMs and pharmacies, the legislation supports transparency and open competition in the state’s pharmacy landscape.

2. Massachusetts Senate Bill 3012.

Signed into law on January 8, 2025, SB 3012 strengthens state oversight and accountability for PBMs operating in Massachusetts. The legislation introduces several important reforms aimed at increasing transparency and protecting consumers. Key provisions include:

• Licensure requirements: The bill establishes a formal licensure program for PBMs under the authority of the Office of the Insurance Commissioner, ensuring that all PBMs operating in the state are properly registered and monitored.

• Oversight and examinations: SB 3012 outlines procedures for the examination and auditing of PBMs, providing the Insurance Commissioner with the tools to assess compliance and performance.

• Broker engagement rules: The law sets standards for how PBMs may work with brokers, aiming to prevent conflicts of interest and ensure that broker-PBM relationships serve the best interests of plan sponsors and members.

3. Idaho House Bill 596.

Effective since January 1, 2025, H 596 introduces several measures to enhance PBM transparency. H 596 prohibits PBMs from:

• Limiting pharmacy networks: The bill prevents PBMs from limiting a pharmacy network to only those pharmacies affiliated with the PBM, ensuring fair competition and access.

• Restricting network participation: It forbids PBMs from making participation in one pharmacy network conditional on participation in another network. This allows pharmacies to enroll in a network to serve members without needing to enroll in more restrictive or cost-prohibitive networks.

• Penalizing non-participation: The legislation prevents PBMs from penalizing pharmacies for not participating in specific networks, ensuring that pharmacies are not unfairly treated for their network choices.

4. Kentucky Senate Bill 188.

Kentucky's PBM reform bill, SB 188, preserves access to pharmacy care for residents while establishing fair access rules under new PBM regulations effective since January 2025. The legislation is designed to safeguard patient choice and promote equitable treatment of pharmacies across the state. Key provisions include:

• Maintaining pharmacy options: The bill prohibits PBMs from requiring patients to use specific pharmacies, such as the PBM's own affiliates or mail-order services. This ensures that patients have the freedom to choose their preferred pharmacy without facing incentives or restrictions from PBMs.

• Ensuring fair access to pharmacy networks: SB 188 mandates that PBMs must offer contracts with the same terms to all pharmacies, not just their affiliates. This includes allowing any pharmacy willing to accept these terms to join the network.

5. New York Senate Bill 9040.

Signed into law on September 27, 2024, NY S 9040 aims to enhance drug pricing transparency for patients when they pick up medication at the pharmacy. The bill focuses on:

• Preventing pharmacy penalization: The bill prohibits PBMs from penalizing pharmacies for providing customers with information about prescription medications and services. This transparency is aimed at helping patients make better-informed decisions about their medication purchases and understanding the financial dynamics behind pharmacy stocking decisions.​

6. Oregon House Bill 4149.

Signed into law on April 4, 2024, Oregon House Bill 4149 enacts comprehensive regulations to enhance oversight of PBMs in the state and create 340B protections. Key elements of HB 4149 include:

• Requiring licensing: HB 4149 requires PBMs to be licensed by the Department of Consumer and Business Services starting January 1, 2025. This move aimed to ensure that PBMs operate under stricter regulatory oversight to protect consumers and pharmacies​.

• Protecting 340B drug programs: The bill includes provisions to protect pharmacies that dispense 340B drugs, which are typically provided at reduced prices to healthcare organizations that serve vulnerable populations. The bill prohibits PBMs from discriminating against these pharmacies and ensures they are not unfairly restricted or reimbursed at lower rates​.

5. Vermont Act No. 127.

Signed into law in May 2024 and effective July 1, 2024, Vermont Act No. 127 focuses on regulating deceptive pharmacy marketing and pricing tactics. The bill specifically addresses:

• Prohibiting spread pricing: The act bans spread pricing, where PBMs charge health plans more than what they reimburse pharmacies, keeping the difference as profit. This measure aligns the prices charged to health plans with the reimbursements to pharmacies, aiming to reduce inflated drug costs and increase transparency.

• Banning deceptive marketing and advertising: The legislation prohibits PBMs from engaging in deceptive marketing and advertising practices. This protects consumers and pharmacies from misleading information that could influence their decisions regarding medications and pharmacy services​.

What ongoing PBM legislation means for employers.

As state legislative sessions continue, more bills will likely be proposed and passed. In the meantime, having a PBM that supports full transparency and medication access is crucial. With audit-level reporting, Rightway sets a new standard in PBM transparency, ensuring that every dollar saved is returned to you and your teams.

Uncover a new level of PBM transparency today with Rightway. Learn more here.

Bills are long, dynamic, and far-reaching. This overview covers some of the current legislation as of June 2025.