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Pharmacy Benefit Managers Remain Priority for State Lawmakers

January 21, 2025 (3 min read)

Just five months ago, we wrote about state legislators’ growing interest in pharmacy benefit managers.

The issue is vital, as pharmacy benefit managers, also known as PBMs, contract with health insurers and employers to manage the prescription drug benefits of millions of Americans.

Legislators’ interest has not waned, as early into a new year of lawmaking, PBMs remain a popular topic for newly introduced bills.

Since the beginning of November 2024, at least 34 measures dealing substantively with PBMs have been prefiled or introduced for the 2025 legislative session in 12 states, according to data from LexisNexis® State Net®. They include:

  • California SB 41, by Sen. Scott Wiener (D), which would require PBMs to obtain a license from the state Department of Insurance.
  • Illinois HB 1018, by Rep. John M. Cabello (R), which would prohibit PBMs from steering covered individuals to a particular mail-order pharmacy or a pharmacy in which the PBM has an ownership interest, among other things.
  • Illinois HB 1159, by Rep. Thaddeus Jones (D), which would bar PBMs not only from steering covered individuals to particular pharmacies but also from limiting covered individuals’ access to prescription drugs and from using spread pricing.
  • Indiana HB 1252, by Rep. Ben Smaltz (R), which would require PBMs in the state to apply annual limitations on cost sharing as set forth in the federal Patient Protection and Affordable Care Act.
  • New York SB 438, Sen. Zellnor Mryie (D), which would establish the Prescription Drug Supply Chain Transparency Act, which, among other things, would govern deposits into a PBM regulatory fund.
  • South Carolina HB 3575, by Reps. Kevin Hardee (R) and Carla Schuessler (R); SB 99, by Sen. Margie Bright Matthews (D); and SB 100, by Sen. Mike Gambrell (R), all of which address cost-sharing matters concerning PBMs.

Indeed, the PBM SmithRx recently wrote on its website: “The pharmacy benefits management...landscape is changing as employers, insurers, and policymakers push for more transparency, cost-effectiveness, and better overall outcomes.”

In that same article, SmithRx identified four PBM trends in 2025:

  1. The adoption of more transparent PBM models.
  1. Increased scrutiny of and regulatory pressure on PBMs.
  1. A growing focus of PBMs on specialty medication management.
  1. PBMs adopting value-based contracting.

“As we move into 2025,” SmithRx wrote, “the PBM landscape is poised for significant change. With a growing focus on transparency, patient outcomes, and specialty medications, the PBM model of the future will be more accountable, cost-effective, and aligned with the needs of employers and their employees. The adoption of value-based contracts and increased regulatory scrutiny will continue to shape the industry, ensuring that PBMs provide value beyond just negotiating drug prices.”

Legislation Focusing on PBMs Already Proposed in Dozen States

Since early November of last year, legislation focusing on PBMs has been prefiled or introduced for the 2025 legislative session in at least 12 states, according to LexisNexis® State Net® data.

PBMs in the News

Just a few weeks into 2025, PBMs have made headlines multiple times. U.S. Sens. Elizabeth Warren (D-MA) and Josh Hawley (R-MO), along with Reps. Jack Auchincloss (D-MA) and Diana Harshbarger (R-TN) have asked the Federal Trade Commission to issue a second interim report on its investigation into PBMs, which began in 2022.

In Mississippi, the PBM OptumRx has sued the state Board of Pharmacy, alleging that the government body violated the company’s right to due process when it released the findings of an audit before wrongdoing was found. The audit by the board found that the PBM may have violated Mississippi law by paying independent pharmacies at lower rates than chains and Optum-affiliated pharmacies for the same medications in 2022.

The new president of the American College of Rheumatology, Dr. Carol Langford, said reforming PBMs’ behaviors and roles in determining how patients will have access to medications will remain a top priority for ACR.

“Patients are making sacrifices to afford their medication, are unable to get approval for the drugs prescribed by their doctor, and often have to modify the use of their medication or skip doses because of barriers to accessing their medications,” Langford said, according to the media company Healio.

Don’t be surprised if we write about PBMs another time or two this year. They’re sure to be a priority for legislators for a while to come.

—By SNCJ Correspondent BRIAN JOSEPH

Visit our webpage to connect with a LexisNexis® State Net® representative and learn how the State Net legislative and regulatory tracking service can help you identify, track, analyze and report on relevant legislative and regulatory developments.

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