States enacted significant pharmacy benefit manager reforms in 2025, including Arkansas's historic pharmacy ownership ban, Massachusetts's comprehensive licensing requirements, and Colorado/California's compensation delinking laws.

States are pursuing extensive pharmacy benefit manager reforms beyond traditional gag clause prohibitions and reporting requirements. Key strategies include delinking PBM compensation from drug prices (Colorado), requiring rebate pass-throughs to consumers (Utah), establishing fiduciary duties to health carriers (North Carolina), and prohibiting PBM pharmacy ownership (Arkansas). Colorado's delinking reform takes effect January 2027, while Arkansas faces legal challenges over its pharmacy ownership ban. These comprehensive approaches represent escalating state efforts to curb PBM practices.

Four governors signed significant PBM reform legislation in recent weeks, with North Carolina, Connecticut, Illinois, and Louisiana enacting comprehensive measures including rebate pass-through requirements, spread pricing prohibitions, and enhanced transparency reporting. However, legal challenges are mounting against state PBM laws. Arkansas faces three lawsuits over its pharmacy ownership ban, Iowa's reform law was temporarily blocked by federal court, and the Supreme Court declined to hear Oklahoma's case, leaving a restrictive appellate ruling in place that could impact future state PBM regulation.

As legislative sessions wind down across the country, attention turns to the executive branch as governors make decisions on bills passed by the legislature. In the past month, various governors have taken action on significant healthcare legislation by signing, vetoing, or allowing bills to become law.

Legislation we’re watching this month, including Certificate of Need in Mississippi, facility fees in Oregon, Medicaid reform in Indiana, and more.

During the 2024 state legislative sessions, 33 bills were enacted in 20 states related to the regulation of pharmacy benefit managers (PBMs). States used a variety of tactics, including spread pricing prohibitions, 340B pharmacies, patient steering and affiliated pharmacies, and mandates for increased reporting of PBM activities.