There is a Rebellion Against PBMs in State Capitals, Not Just in Washington

Executives of pharmacy benefit managers (PBMs) have been dragged in front of Congressional committees for their role in inflating drug prices and undercutting local pharmacies, so it’s no wonder why headlines may make folks think that PBM reforms are only being considered in Washington, but that is far from the case. 

From coast to coast, lawmakers from both parties are listening to their constituents — especially local pharmacists — and stepping up at a time when federal action has stalled. And in many ways, states are uniquely positioned to go after PBMs because they regulate many of the insurance plans PBMs operate under. These efforts are long overdue, and they’re being driven not by political ideology but by the simple fact that even people with health insurance are being forced to choose between paying rent and filling a prescription. A number of states have already enacted PBM reforms. Here are four states where PBM reforms seem to have a good chance of passing this year.

In Alabama, the fight against PBMs has taken on a deeply personal tone because more than 300 of the state’s independent pharmacies have shut their doors in just six years. The closure of these businesses is more than a blow to local economies. It’s a health care emergency in rural areas where the nearest pharmacy are  now tens of miles away in many cases.

Lawmakers there have just passed SB252, the “Community Pharmacy Relief Act,” and it is on its way now to  Governor Kay Ivey for her signature. As reported by the Alabama Reflector, the bill takes aim at unfair fees PBMs charge pharmacies and their ability to steer patients to PBM-owned chains. It bans reimbursements below Medicaid rates, requires PBMs to pass 100% of manufacturer rebates to health plans, and blocks PBMs from preventing pharmacists from telling patients about lower-cost options.

The bill passed unanimously in both chambers — a rare feat these days — thanks in part to Rep. Phillip Rigsby, a pharmacist who described the legislative battle as one fueled by faith and persistence. “When I felt defeated, that’s when my faith reminded me,” Rigsby said.

Alabama is really taking this issue seriously. Last week, HEALTH CARE un-covered published a piece that tackled a different piece of PBM legislation, SB99. Here is a quote from that piece:

Senate Bill 99 aims to ensure independent pharmacists don’t lose money on filling a prescription, with a $10.64 dispensing fee on each transaction. It recently passed the State House on a 34-0 vote and has cleared a Senate committee.

The proposal would also eliminate onerous “gag clauses” on pharmacists that prevent them from telling their customers that PBM overpricing is the issue when they are unable to stock their medication – a practice that points to the political clout that big corporations have long held in Alabama and other states.

In Arkansas, lawmakers just passed a direct challenge to the vertically integrated business model favored by the industry’s largest players with HB1150 – a proposal that would ban PBMs from owning pharmacies.  

The bill, which awaits Governor Sarah Huckabee Sanders’ signature, aims to dismantle insurance companies’ ability to own both the PBM negotiating drug prices and the pharmacy that fills prescriptions. As Benjamin Jolley, Senior Fellow for Healthcare at the American Economic Liberties Project put it: “Big Medicine-pharmacy conglomerates can’t be responsible for saving employers money on medications and responsible for selling medications at high prices simultaneously.”

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The problem is especially acute in Arkansas, where at least 25 independent pharmacies have closed between January 2024 and February 2025, according to Economic Liberties. Many accepted rock-bottom reimbursement rates just to stay in PBM networks — only to go out of business anyway.

HB1150 mirrors bipartisan federal legislation — the Patients Before Monopolies Act — introduced by Senators Elizabeth Warren and Josh Hawley, along with Representatives Jake Auchincloss and Diana Harshbarger. But with Washington gridlocked, Arkansas isn’t waiting. It’s moving first.

Lawmakers in Sacramento are considering SB41 which would bring some of the toughest state oversight of PBMs in the U.S. by requiring PBMs doing business in California to be licensed by the state’s Department of Insurance starting in 2027. 

The bill would ban spread pricing — the practice of charging health plans one price for a drug while reimbursing the pharmacy far less, pocketing the difference — beginning in 2026. Violations wouldn’t just be regulatory slaps on the wrist; they’d be crimes.

“It is past time California caught up with other states and put basic protections in place to contain the astronomical cost of basic medications,” Sen. Scott Wiener (D-San Francisco), who introduced the bill, said in a statement.

The California proposal is a response to this crisis — and it reflects a growing awareness that PBMs aren’t just shaving a little off the top. They’re undermining affordability, harming patients and worsening health outcomes.

In North Carolina, a legislative showdown over PBMs is unfolding as it has in other states, with pharmacists demanding relief while PBMs and their political allies are flooding inboxes with scare tactics, claiming PBM reform will result in higher prices.

As WRAL News reported, HB163, which passed the House Health Committee, would require PBMs to pay pharmacies more fairly — at least the national average drug acquisition cost plus a $10 dispensing fee. It would also force PBMs to let patients choose their pharmacy and require PBMs to pass on rebates instead of hoarding them as profit. But if you ask the Pharmaceutical Care Management Association (PCMA), the PBM lobbying arm, the bill is a “tax” on patients.

Lawmakers in North Carolina and elsewhere are beginning to see those claims as nonsense. “While I have absolutely mad respect for the deceptive sleight-of-hand in the ‘$10 tax’ emails that many of you have gotten, that is simply not true,” said bill sponsor Rep. Heather Rhyne, a Republican and practicing pharmacist.

PBMs often reimburse pharmacies less than what it costs them to buy the drug — and then tell insurers the drug was more expensive than it really was, pocketing the difference. (Note: the three biggest PBMs, which control 80% of the market, are owned by big insurers.) The name for this is spread pricing. Spread pricing drives up insurance premiums, slashes pharmacy margins, and reduces competition by nudging patients into PBM-owned chains.

Critics like Rhyne argue this bill is simply about fairness and transparency — two things PBMs have successfully avoided for decades. And she’s not alone: last year, 20 states passed PBM reform bills. I think the momentum is real.

What we’re witnessing may be the slow but steady unraveling of a system that’s profited from secrecy, confusion and  monopoly power. PBMs were never supposed to be the story — they were supposed to be administrators working in the background. But when your business model depends on taking money from everyone else without paying out what is fair and appropriate – the spotlight eventually finds you.

States are stepping in while federal lawmakers, Republicans and Democrats alike, try to figure out how to get their bills across the finish line in Congress. And whether it’s a pharmacist in Gadsden, Alabama, or a legislator in Raleigh or Sacramento, they’re saying the same thing: enough is enough.