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

  • States are pursuing four major PBM reform strategies in 2025: delinking compensation from drug prices, requiring rebate pass-throughs to consumers, establishing fiduciary duties to health carriers, and prohibiting PBM ownership of pharmacies.
  • Delinking represents the most comprehensive reform by mandating flat fees instead of rebate-based compensation, with Colorado being the only state to adopt this approach, taking effect in 2027.
  • Fiduciary duty requirements are expanding beyond Maine and Vermont's pioneering efforts, with North Carolina adding this provision to ensure PBMs act as health carriers' agents rather than pursuing conflicting interests.
  • Arkansas made headlines by becoming the first state to prohibit PBM pharmacy ownership, though immediate legal challenges have prevented implementation, while similar measures in Indiana and Louisiana were removed from their respective bills.


For several years, states have been actively curbing the operations of pharmacy benefit managers (PBMs). Legislators have pursued various approaches to PBM reform, including prohibiting gag clauses in pharmacy contracts and imposing numerous reporting obligations. The latest reform strategies are extensive, focusing on rebate pass-throughs, delinking, fiduciary duty, and pharmacy ownership.


Types of State PBM Reform Legislation

Delinking

Instead of basing PBM compensation on rebates and discounts negotiated with drug manufacturers or the list prices of drugs, delinking would mandate that PBMs receive flat, fixed fees for their services. This price structure would “delink” the price of the drugs from the PBMs’ profit, thus removing incentives for PBMs to charge higher prices for prescriptions. Colorado is the only state that has adopted such a reform. It takes effect January 1, 2027.

Rebate Pass-Through 

Manufacturers offer rebates for the purchase of their pharmaceuticals, but it can get a little complicated when the end user of the product did not purchase it directly from the manufacturer. PBMs earn millions of dollars by keeping the rebates on drugs they get from the manufacturer. Utah adopted a bill that requires health insurers to make sure their PBMs either pass the rebate on to the consumer at the point of sale, use the rebates to reduce premiums of the enrollee, or increase benefits for the enrollee.

Fiduciary Duty

Fiduciary duty is a relatively new concept to the world of PBMs. These bills ensure that the PBM acts as the health carrier’s agent and owes a fiduciary duty to the carrier with relation to prescription drug benefits. Prior to this year, only two states (Maine and Vermont) mandated that PBMs owe a fiduciary duty to the health carrier. North Carolina’s major PBMs reform bill added this provision to PBM requirements this year. 

Prohibition on Pharmacy Ownership

This year, the most significant news in pharmacy benefit manager (PBM) reform is Arkansas's new law prohibiting PBMs from owning pharmacies. While similar measures in Indiana and Louisiana were ultimately removed from their respective bills, Arkansas's prohibition was enacted. However, the law has not yet taken effect due to immediate legal challenges.


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