Quarterly State-Level Regulatory Update
Current as of April 11, 2025
During the first quarter, 49 states across the U.S. opened their general sessions, leaving only Louisiana, which convenes in the second quarter. Six states wrapped up quickly (Kentucky, New Mexico, South Dakota, Utah, Virginia, and Wyoming) without adopting significant PBM legislation.
So far, the top focus areas include:
- Utilization management (>200 bills)
- Affiliate pharmacy or steering restrictions (>50 bills)
- Dispensing fee (>50 bills)
- Spread pricing (>40 bills)
- Copay accumulator (>40 bills)
A handful of bills in several states are also targeting vertical integration, preventing pharmacy benefits managers (PBMs) from being affiliated with pharmacies or health insurers. Issues affecting rebates (delinking, point-of-sale rebates, and pass-through) also remain popular.
As of the close of the first quarter, no “critical” bills – those that could have a potentially significant and/or broad impact – have become law, but that is likely to change. Here’s a look at critical, high-priority bills pending at the state level at the start of the second quarter.
Alabama SB 252
Despite strong opposition from a coalition of employers, SB 252 has passed both chambers and will advance to the Governor for signature or veto.
Bill Summary
- Imposes any willing pharmacy network requirements
- Mandates reimbursement and dispensing fees equal to the state Medicaid program ($10.64) for community pharmacies
- Requires point-of-sale rebates or pass-through
- Prevents spread pricing
- Broad anti-steering mandates
- Removes self-funded ERISA exemption from current law
Arkansas HB 1150
Despite opposition testimony in a recent committee hearing, this bill passed both chambers and will be presented to the governor.
Bill Summary
- Prevents PBMs and healthcare payors from owning direct or indirect interests in a pharmacy permitted for the retail sale of drugs in Arkansas
Colorado HB 1094
This bill passed the House and is in committee in the Senate, where the pharmacy reimbursement provisions are expected to be a key priority.
Bill Summary
- Mandates reimbursement at NADAC + $2, plus the contracted dispensing fee
- Delinking/prohibition on spread pricing
Illinois HB 3705
This bill was recently amended in committee to include several key issues and is expected to be supported by the Governor’s office. It is currently pending in the House.
Bill Summary
- Prohibits spread pricing
- Broad anti-steering mandates
- Requires a NADAC + $15.55 mandatory reimbursement for “critical access pharmacies”
Indiana SB 140
Although this bill passed the Senate, we expect it to be amended in the House, potentially removing the most impactful provisions. We continue to monitor it closely.
Bill Summary
- Imposes any willing pharmacy network mandate
- Requires reimbursement at acquisition cost
- Mandates a minimum $10.48 dispensing fee
- Prevents PBMs from holding an ownership interest in a pharmacy
- Anti-steering provisions
Iowa HF 852/SF 383
After advancing out of their respective committees, these bills were renumbered (previously HSB 99/SSB1074). Neither has passed the first chamber but both apparently remain a priority for lawmakers.
Bill Summary
- Imposes any willing pharmacy network requirement
- Prevents steering
- Requires point-of-sale rebates
- Prohibits copay accumulator programs
- Mandates reimbursement at NADAC
- Mandates a minimum $10.38 dispensing fee
- Prevents spread pricing
Massachusetts H 1358
Massachusetts is in session for most of the year, so most bills are early in the process. This bill is currently in committee. We will continue to monitor its progress.
Bill Summary
- Requires point-of-sale rebates
- Imposes any willing pharmacy networks mandate
- Prevents steering to affiliated or owned pharmacies
- Prohibits spread pricing
- Imposes a fiduciary duty requirement on PBMs
Minnesota SF 3063/HF 2851
So far, neither of these companion bills has advanced out of the first chamber, and an omnibus bill that incorporates some, all, or none of the PBM provisions currently in the individual bills may be in the works.
Bill Summary
- Prevents spread pricing
- Imposes fiduciary duty requirements on PBMs
- Mandates reimbursement at NADAC
We are also tracking Minnesota SF 1806, which would prohibit certain formulary changes.
Missouri SB 45
Currently pending in the Senate, the bill is on the calendar for perfection, a step preceding a vote in the first chamber.
Bill Summary
- Prohibits copay accumulator programs
- Imposes fiduciary duty requirements on PBMs
- Prohibits spread pricing
Montana HB 740
After passing the House, the bill is now making its way toward passage in the Senate.
Bill Summary
- Mandates reimbursement at 106% of NADAC
- Requires a dispensing fee equal to state Medicaid rate ($12.46-$17.01)
- Prohibits steering
Nevada SB 316
While no substantive action has been taken so far, the bill has been scheduled for a committee work session.
Bill Summary
- Prohibits steering
- Imposes any willing pharmacy network requirement
- Imposes fiduciary requirements on PBMs
- Mandates reimbursement at acquisition cost
New Jersey A4953/S 3842
These companion bills were carried over from 2024 and remain in play. Because the legislature is in session all year, New Jersey has plenty of runway on PBM issues.
Bill Summary
- Prohibits spread pricing
- Mandates reimbursement at acquisition cost
- Mandates that out-of-network pharmacy use be allowed
- Imposes fiduciary duty requirements on PBMs
- Proposes removing self-funded ERISA plans exemption from current law
New York A 5882
Similar to proposals defeated in previous years, this current bill has yet to move forward. We will continue to monitor due to the potential financial impact on plan sponsors.
Bill Summary
- Mandates that reimbursement be the greater of NADAC or acquisition cost
- Mandates a dispensing fee equal to the state’s $10.18 Medicaid rate
Like other states, New York has also introduced a bill – A 6546 – that would require PBMs to divest any ownership interests in pharmacies.
North Carolina HB 163
Despite significant opposition testimony, the bill has passed out of committee but has not yet advanced out of the House.
Bill Summary
- Prohibits spread pricing
- Mandates reimbursement at NADAC
- Requires a minimum $10.84 dispensing fee
- Prohibits steering to mail-order pharmacies
Oklahoma SB 789
After passing the Senate, this bill is moving to committee in the House for consideration.
Bill Summary
- Mandates reimbursement at 106% of NADAC
- Requires a minimum dispensing fee of $15.00 (indexed for inflation)
Oregon HB 3212
This bill has not advanced out of the House and remains in committee. Still, we are actively watching this bill.
Bill Summary
- Bans on spread pricing
- Mandates a minimum dispensing fee of $9.80-$14.30
- Requires reimbursement at NADAC
- Imposes any willing pharmacy network requirements
We are also monitoring OR 2252 which would prohibit PBMs from being affiliated with a health insurer.
South Carolina SB 342
South Carolina has yet to pass any substantial PBM restrictions and it is unclear whether SB342 will gain critical mass. We continue to monitor due to the presence of several key issues.
Bill Summary
- Mandates a dispensing fee mandate equal to the state’s Medicaid rate of $10.50
- Imposes an additional enhanced dispensing fee of $7.00 for low-volume pharmacies – those dispensing fewer than 65,000 prescriptions annually
- Mandates reimbursement at 104% of NADAC
Texas SB 1122
This bill was reported favorably out of committee and remains under consideration in the Senate.
Bill Summary
- Appears to apply existing PBM regulations to self-funded ERISA plans
- Applies PBM regulations to out-of-state plans with Texas residents
In addition, we are also monitoring priority bills HB 5457 – which prohibits PBMs from owning pharmacies – and HB 2978 – which mandates a dispensing fee of $7-$10.
ERISA Preemption
Another important development that could have broad implications for plan sponsors is ERISA preemption. In 2020 the Supreme Court ruled that states could regulate ERISA plans for specific PBM rate regulations such as NADAC and dispensing fee mandates. In recent years, many states have introduced legislation that could impose additional network, pricing, and rebate requirements on ERISA plans. The PCMA v. Mulready case currently pending before the Supreme Court, could ultimately decide whether states have broad authority to regulate ERISA plans.
All of these developments are why it is more vital than ever for benefits advisors to remain informed and advocate on behalf of their plans – those with ERISA and non-ERISA plans alike.
Please note: This summary was drafted for informational purposes only and should not be construed as legal advice. The bills listed above were selected for their potential to have significant impact should they be enacted, and this list should not be interpreted as a comprehensive list of state bills that may impact your plan. Due to the nature of the legislative process, this information is preliminary and subject to change.
