State Impacts of the One Big Beautiful Bill Act of 2025
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Key Takeaways:

  • States ramped up efforts in 2025 to reform pharmacy benefit managers through new laws targeting ownership restrictions, transparency requirements, and compensation models that critics say harm independent pharmacies and obscure drug pricing.
  • Arkansas made history by banning PBMs from owning pharmacies through House Bill 1150, though the law faces legal challenges and a preliminary injunction has temporarily blocked enforcement.
  • Massachusetts enacted comprehensive PBM licensing and transparency requirements under Senate Bill 3012, mandating detailed reporting and oversight with implementation deadlines extending into 2026.
  • Colorado and California both passed "delinking" laws that prohibit PBM compensation from being tied to drug prices, instead requiring flat-fee models to remove incentives for favoring expensive medications.
  • Several states including Utah implemented rebate pass-through requirements, forcing PBMs to ensure drug rebate savings directly benefit consumers rather than just increasing company profits.


States accelerated legal and regulatory action in 2025 to curb perceived PBM (pharmacy benefit manager) practices that harm independent pharmacies, obscure rebate flows, and link PBM profit to drug list prices. While state approaches differ, the year produced several notable enactments that illustrate the mix of incremental and ambitious reforms being pursued across the country.

Key State PBM Reform Legislation in 2025

Legislative actions across various states in the recent session have significantly targeted the practices of PBMs, focusing on several key areas: ownership restrictions, enhanced licensing and transparency requirements, mandates for rebate pass-through, and fundamental shifts in PBM compensation models.

Arkansas Pharmacy Ownership Ban and Legal Challenges

One of the most groundbreaking developments came from Arkansas, which enacted a first-in-the-nation ban on PBMs owning or operating pharmacies. This legislation, House Bill 1150, intends to safeguard the interests and viability of independent pharmacies within the state, aiming to prevent potential conflicts of interest and ensure a more competitive market. However, the implementation of this law has not been without challenges. It has already become the subject of legal battles, facing litigation and a preliminary injunction that has temporarily halted its full enforcement, highlighting the contentious nature of such reforms. Louisiana and Indiana each introduced bills that would also prohibit PBM ownership of pharmacies, but neither bill contained that provision in their final versions.

Massachusetts Licensing and Transparency Requirements

Massachusetts, on the other hand, pursued a different but equally impactful approach by enacting an expansive PBM licensing and transparency law (Senate Bill 3012). This comprehensive legislation mandates rigorous registration, detailed reporting, and robust oversight mechanisms for PBMs operating within the Commonwealth. The law includes a series of staggered implementation deadlines, extending into late 2025 and early 2026.

PBM Compensation Delinking Laws in Colorado and California

Colorado introduced a significant structural change with the passage of its delinking law, House Bill 1094. This legislation fundamentally alters how PBMs are compensated, prohibiting their remuneration from being tied to the price of drugs. Instead, it transitions PBM compensation to a flat-fee model, aiming to remove incentives for PBMs to favor higher-priced medications. This delinking rule is scheduled to take effect in 2027, allowing time for industry adjustments. Similarly, California's legislature also enacted a PBM delinking provision (Senate Bill 41), signaling a broader trend towards this compensation model reform. This bill mirrors Senate Bill 966, from the 2023 session, which passed both legislative chambers in the previous session but was vetoed by Governor Newsom (D). However, he did sign SB 41 in mid-October, allowing it to become law.

Rebate Pass-Through Mandates for Consumer Benefits

Beyond these structural and regulatory shifts, several states, including Utah with House Bill 257, have focused on ensuring that the financial benefits derived from drug rebates directly impact consumers. These legislative efforts mandate rebate pass-through mechanisms, requiring PBMs to either utilize rebates at the point-of-sale or implement other measures to directly reduce enrollee cost-sharing. This push aims to increase transparency in drug pricing and ensure that the savings generated from rebates ultimately benefit patients rather than solely PBMs.

What's Next in 2026?

In 2026, states are expected to continue experimenting with different modes of PBM reform legislation. Increased transparency and licensure requirements are likely to gain bipartisan support, as they are less susceptible to immediate legal challenges. While some states will persist in pursuing delinking and ownership bans, these efforts will face ongoing litigation and strong industry opposition.

Federal efforts to reform PBM actions persist. In April 2025, 39 Attorneys General signed a letter urging Congress to pass reforms such as prohibiting pharmacy ownership, preventing non-affiliate discrimination, and combating anti-steering practices. However, with the current federal government shutdown, the passage of any significant legislation this year remains uncertain.

The lack of a uniform federal framework means PBMs and health plans will navigate an increasingly intricate compliance environment. State-level regulations will be crucial in shaping operational strategies, contract provisions, and the boundaries tested by litigation.


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