State updates
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.