As of 2026, all 50 states have implemented legislation that includes regulations for pharmacy benefit managers (PBMs). In fact, the past two years have seen a surge in new laws, and as such, PBMs are facing unprecedented regulatory attention across the United States.
These regulations don’t just affect PBMs; health insurers, employer health plan sponsors, third-party administrators, and pharmacies all face new rules around drug pricing transparency, contracting, and patient protections. This article explores some of the notable PBM regulations across the U.S. and shares strategies to help different stakeholders prepare for compliance.
What Are the Federal Regulations for PBMs?
Few federal laws address PBM regulation as of February 2026, but several bills have been introduced in recent years. These include regulations focused on transparency, rebate pass-through, and banning spread pricing. For example, the Pharmacy Benefit Manager Transparency Act was introduced in the Senate in 2025. If enacted, it would ban rebate retention and require full disclosure of rebates and fees.
More recently, the Consolidated Appropriations Act, 2026 was enacted on February 3. It includes major provisions aimed at regulating PBMs, largely based on key portions of Representative Earl Carter’s proposed PBM Reform Act. Notable provisions in this funding package related to PBMs include:
- Prohibiting PBM compensation in Medicare Part D from being tied to the manufacturer’s list price of a drug in an effort to reduce drug prices and save money for taxpayers.
- Promoting price transparency for prescription drugs purchased by employer health plans by requiring PBMs to provide group health plans and issuers with detailed data on prescription drug spending.
- Requiring CMS to define and enforce “reasonable and relevant” Medicare Part D contract terms, including:
- Information about reimbursement and dispensing fees.
- An appeals process for pharmacies to dispute terms that do not follow the reasonable and relevant standards.
- Promoting transparency by allowing CMS to track payment trends to pharmacies and pharmacy inclusion in PBM networks, including a designation of essential retail pharmacies.
What Are State Laws for PBMs?
In the absence of federal legislation, states have stepped in to regulate PBMs aggressively. All 50 states now have PBM laws, and in 2024 alone, 20 states enacted 33 PBM bills. Examples of state PBM legislation include:
- Alabama: Senate Bill 252, the Community Pharmacy Relief Act, was enacted in 2025. It prohibits PBMs from steering or under-reimbursing local pharmacies. PBMs must allow independent pharmacies into their networks and pay at least the benchmark rates.
- California: Senate Bill 41, enacted in 2025, includes sweeping reforms intended to lower the cost of prescription drugs by regulating PBM practices. The law applies to PBMs that “operate in California,” not just those that are physically located or headquartered in California. The law prohibits spread pricing, mandates pass-through rebates, requires state licensures, and introduces comprehensive disclosure obligations. It also directly affects Knox-Keene licensed healthcare service plans that provide prescription drug coverage. By March 19, 2026, affected health plans must submit information to the California Department of Managed Health Care detailing their compliance actions in accordance with the law’s requirements.
- Florida: Senate Bill 1550, the Prescription Drug Reform Act, was enacted in 2023. It outlaws spread pricing and requires 100% pass-through of all discounts.
- Illinois: House Bill 1697, the Prescription Drug Affordability Act, was enacted in 2025. This law joins a trend across the country of regulating PBMs to prevent certain common industry practices, including spread pricing, steering to PBM-owned or affiliated pharmacies, and retaining prescription drug rebates.
- Massachusetts: Senate Bill 3012, An Act Relative to Pharmaceutical Access, Costs, and Transparency, was enacted in 2025. The law includes regulations related to cost sharing and requires PBM licensure as of January 1, 2026. It also increases data transparency and oversight within the pharmaceutical supply chain through a multifaceted approach that aims to reduce prescription drug costs.
- North Dakota: House Bill 1584, enacted in 2025, requires PBMs and plan “administrators” to hold a state license.
- Pennsylvania: Act 77, the Pharmacy Benefit Reform Act, was enacted in 2024. It expands the Pennsylvania Insurance Department’s regulatory authority over PBMs, changes the registration process for PBMs and Auditing Entities, and introduces a new registration requirement for Pharmacy Services Administrative Organizations.
Key Themes of PBM Reform
While the specific details of PBM regulation vary from state to state, there are a few common themes:
- Transparency & Fees: Many state laws prohibit PBMs from spread pricing and require passing manufacturer rebates to health plans or patients.
- Fair Pharmacies: Recent state legislation indicates a shift toward banning PBMs from steering patients to their own pharmacies and requiring equal reimbursement for independent pharmacies.
- Oversight: States are imposing licensure, fiduciary duties, audits, and sanctions to increase accountability for PBMs.
How Can Organizations Prepare for Compliance With PBM Regulations?
Proactive preparation is imperative for PBMs to achieve compliance with the laws that apply to them. This preparation also can help organizations capitalize on the transparency and cost-saving opportunities these reforms create. By taking action now, organizations can help reduce their legal risk, improve performance, and build stronger trust among key stakeholders.
PBMs should consider reviewing and revising their business models in compliance with existing regulations or in preparation for new PBM laws. Specific considerations include:
- Eliminate Spread Pricing: Spread pricing is a practice in which a PBM charges a payor a higher price for a drug than it reimburses the pharmacy and keeps the difference. With many states banning this practice, PBMs should consider transitioning to pass-through pricing in their contracts, e.g., charging payors the same price paid to pharmacies plus a clear administrative fee.
- Restructure Revenue Streams for Rebate Pass-Through: Rebate pass-through requires PBMs to pass through manufacturer rebates and price concessions in their entirety to health plans or consumers. To proactively address these new requirements, PBMs should consider renegotiating contracts now to institute flat per-claim or per-member fees that are clearly documented.
- Licensure & Reporting Compliance: PBMs should monitor and track the regulatory and operational requirements in every state in which they do business and obtain any needed PBM licenses by the required deadline. They should also be prepared to collect and report data such as rebates, dispensing fees, price differences, and conflicts of interest. Creating a state-by-state compliance checklist covering licensing, reporting, contractual, and operational requirements would be a best practice.
- Fiduciary Standards & Conflict-Free Practices: Legislation is trending toward imposing a fiduciary duty on PBMs to act in the “best interest” of their clients. Proactive steps PBMs can take to demonstrate compliance with this trend include refraining from favoring higher-rebate drugs, establishing an internal compliance officer or compliance committee to review formulary and network decisions for fiduciary alignment, and considering firewalls and impartial performance metrics.
- Anti-Steering & “Any Willing Pharmacy”: Many states now ban PBMs from steering patients to use PBM-owned pharmacies or from excluding independent pharmacies. PBMs should review their network contracts and consider removing any requirements that patients exclusively use certain pharmacies or penalties for using non-affiliated pharmacies. They should also consider updating network admission criteria to accept any pharmacy that meets the requirements.
- Transparency: PBMs should consider investing in tools to share real-time data with clients regarding pharmacy spending and savings. Effective tools should be able to produce regular, detailed reports itemizing drug costs, rebates received, amounts passed through, and any fees or spread on each claim.
- Monitor Legal & Regulatory Developments: PBMs should pay attention to the status of legal challenges to new state and federal laws, as well as current and future regulatory requirements.
How Should Health Plans & Pharmacies Respond to PBM Regulations?
PBMs aren’t the only entities affected by the recent spate of legislation. Health plans, third-party administrators, pharmacies, and other stakeholders must also pay attention to PBM laws in the states where they operate to understand compliance requirements and identify opportunities to improve PBM contracts. The following are suggestions to consider for these groups.
- Track & Review Federal & State Laws: Like PBMs, these other stakeholders should monitor legal and regulatory requirements, including new licensure and reporting requirements that may apply to them.
- Review &/or Renegotiate PBM Contracts: Health plans, pharmacies, and other stakeholders should pay attention to contract language regarding spread pricing, rebate pass-through, audits, and termination, and consider updating their PBM contracts to bring them into compliance with new regulations.
- Monitor PBM Compliance: To help hold PBMs accountable to regulations, stakeholders may consider implementing reporting requirements and/or independent audits. They can also help enforce transparency by requiring PBMs to disclose all payments and act as fiduciaries.
- Consider Operational Adjustments: Health insurers should consider modifying benefit plan designs to comply with patient protections. Stakeholders should also review and update systems and operational processes for compliance as necessary.
- Communicate & Engage: As health plans make adjustments related to PBM regulations, they should maintain transparent communication about any changes with plan members.
- Evaluate Options: Health plans and pharmacies can use new PBM regulations—including those related to transparency and new pricing models—as an opportunity to budget and reallocate anticipated rebate savings, revisit their network involvement, and investigate new partnerships for growth opportunities. For example, as they conduct competitive reviews of PBMs in their market, these stakeholders should consider including PBMs whose business models are more aligned with the new regulatory changes. During this process, it’s important to pay attention to the commitments different PBMs offer to support compliance.
How Forvis Mazars Can Help
Our healthcare compliance professionals help PBMs, payors, pharmacies, and other stakeholders monitor and maintain compliance with a wide range of evolving regulations. If you have questions about how new regulations may affect your organization, please reach out to our team today.