Regulations to watch: Summer 2025

While most of the 50 states holding 2025 legislative sessions have adjourned for the year, legislatures in California, Massachusetts, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania and Wisconsin are still in session and considering new laws that could restrict the PBM tools and contracting methods that clients use to manage their pharmacy benefit costs.

Examples of pending legislation that could be impactful to employers, unions and health plan sponsors include: 

California

California Senate Bill 41 has passed the Senate and is currently under consideration by the Assembly. This legislation would:

• Ban spread pricing arrangements between PBMs and clients
• Mandate pharmacy reimbursement at National Average Drug Acquisition Cost (NADAC), plus a dispense fee equal to the Medi-Cal dispense (currently $10.05)
• Mandate that non-PBM-affiliated pharmacies be reimbursed no less than PBM-affiliated pharmacies
• Require that any pharmacy willing to accept standard terms and conditions be allowed into a pharmacy network
• Mandate 100% of manufacturer rebates be passed through to clients

California is scheduled to adjourn on September 12, 2025. 

New Jersey

The New Jersey Assembly Financial Institutions Committee continues to consider legislation that would amend comprehensive PBM legislation enacted in 2023. Assembly Bill 4953 includes a mandate on PBM compensation delinking from drug prices and several provisions that strengthen pharmacy contracting leverage. 

The bill applies to the fully insured market, but also to local governments, union health plans and private sector ERISA plans, but exempts the New Jersey state employee health plans. 

The legislation has not yet passed either chamber of the New Jersey legislature, which is in session until early 2026.

Wisconsin

Wisconsin lawmakers are considering comprehensive pharmacy benefit legislation that would:

• Establish mandatory pharmacy reimbursement rates and dispensing fee
• Prohibit mail order incentives
• Mandate any willing pharmacy networks
• Restrict pharmacy accreditation standards beyond what the Board of Pharmacy requires
• Prohibit copay coupon accumulators
• Prohibit mid-year formulary changes

Because the Senate Health Committee did not advance the bill in mid-June, it is unlikely to be revisited by the legislature until after Labor Day due to focus shifting to budget discussions. 

Emerging issue: Legislation forcing closure of pharmacies 

Arkansas

Arkansas House Bill 1150, which was signed into law on April 16, 2025, prohibits any pharmacy affiliated with a PBM from obtaining or maintaining a pharmacy permit to operate in Arkansas. This legislation directly impacts all PBM-affiliated retail and specialty pharmacies located in Arkansas or mail order pharmacies that ship prescriptions into the state.

The forced closure of these pharmacies will disrupt care for and eliminate services relied on by Arkansas patients, including cancer patients, veterans, seniors and residents living in rural areas of the state. 

In addition, patients, employers, unions and health plan sponsors could all experience increased costs as they lose access to these pharmacy options, which can deliver significant cost savings.

Expansion of laws like House Bill 1150 to other states would compound the impacts on patients, employers, unions and health plan sponsors. Indiana and Louisiana are two examples of additional state legislatures that considered but did not pass forced pharmacy closure legislation during their regular 2025 legislative sessions.

We expect to see many more states take up this issue in 2026. We invite clients to take action to prevent additional states from enacting similar legislation and to guard against a growing ban that would impede clients’ access to PBM-affiliated pharmacies. Please contact your account management team to learn more.

Reconciliation legislation signed by President Trump

On July 4, 2025, President Trump signed into law legislation containing tax and spending policies. While the initial reconciliation package passed by the House contained provisions impactful to pharmacy benefits under the Medicare and Medicaid programs, the final package passed by both chambers and sent to the President did not include a prohibition on spread pricing and mandated dispensing fee in managed care Medicaid or a “delinking” policy for Part D plans. With removal of these provisions from the package, Congress is likely to introduce end-of-year health care legislation that will include the removed provisions, plus additional provisions that could impact commercial plans.

Federal enforcement of mental health parity rule delayed 

Recently, the Health and Human Services, Labor, and Treasury departments released a temporary non-enforcement policy of the mental health parity rule until a related lawsuit brought by the ERISA Industry Committee (ERIC) is resolved, plus an additional 18 months after that date. The Biden Administration’s mental health parity rule created a test for employers to ensure their plans cover mental healthcare equally with traditional medical services. The rule took effect in 2025 but was challenged by the employer advocacy group ERIC in January. 

The case was put on hold on May 12, 2025 after the Trump Administration said it was revisiting the rule. Additional details on this announcement are available on the Department of Labor website. 

Trump Administration releases drug pricing executive order 

On May 12, 2025, President Trump signed an executive order titled “Delivering Most Favored Nation Prescription Drug Pricing to American Patients.” The order notes the “egregious imbalance” of U.S. drug prices compared to those paid in other countries and drug manufacturers’ unwillingness to charge Americans the lower prices they do abroad.

The order outlines several policies the administration will undertake to “end global freeloading” and more closely align U.S. drug prices with those internationally, including directing the U.S. Trade Representative to take action against foreign countries that suppress drug prices below fair market value and encouraging drug manufacturers in the U.S. to voluntarily offer direct-to-consumer (DTC) sales of drugs at international prices. 

The order specifies that if “significant progress” on most-favored-nation pricing is not made within 180 days, the administration could pursue rulemaking, expand opportunities to import medicines from other countries, and initiate Department of Justice (DOJ) and Federal Trade Commission (FTC) enforcement actions against drug manufacturers for anti-competitive practices.

The near-term impact of the order is unclear, as the administration has significant discretion in defining key policy details and next steps.

New research underscores cost-saving role of PBMs

On May 13, 2025, new research was published by George S. Ford, Ph.D., Chief Economist at the Phoenix Center for Advanced Legal and Economic Public Policy Studies, which highlighted the cost-saving role of PBMs in the health care system. The research showed that PBMs help make prescription drugs more affordable and offer a competitive, dynamic marketplace with various models for plan sponsors. 

PBMs can reduce drug costs by 17% to 47%. From 2007–2018, list prices for brand-name drugs rose 159%, but net prices increased by only 60%. The introduction of therapeutic alternatives also resulted in an 18.5% reduction in spending. This research will be leveraged to demonstrate to policymakers and stakeholders the critical role PBMs play in lowering healthcare costs and improving access to affordable medications.

Legislation regulating PBMs has the potential to have significant cost impacts on Optum Rx clients and their members. That is why we regularly meet with policymakers, legislators and regulators to educate them about the potential implications these laws can have.

Optum Rx, through its External Affairs team and the Pharmaceutical Care Management Association, is actively opposing legislation that will reduce choice and flexibility in how plan sponsors manage and design their prescription drug benefits.

If you wish to engage in outreach to policymakers about legislation in your state, please contact your Optum Rx representative.