Washington, D.C. – Podcast host Bridgette Keller and policy associate David Gilboa recently discussed crucial developments in the Pharmacy Benefit Manager (PBM) sector during the Spring 2025 PBM Policy and Legislative Update. Their conversation highlighted key federal and state legislative activities that are influencing the operational landscape for PBMs this season.
Among the most significant federal proposals is the Pharmacy Benefit Manager Transparency Act of 2025, which aims to eliminate spread pricing and mandates full disclosure of rebates and fees between PBMs and stakeholders. Alongside it, the Prescription Pricing for the People Act is calling for an investigation into PBM practices by the Federal Trade Commission (FTC), focusing on issues such as patient steering and formulary manipulation.
The bipartisan Health Care Act also attempted to reactivate earlier PBM reforms that did not make it into last year’s spending bill, although progress on that front came to a halt in March. Nonetheless, new initiatives, such as the Protecting Pharmacies and Medicaid Act and the Prescription Drug Transparency and Affordability Act, are advocating for pass-through pricing and stricter reporting requirements. Recently, the House passed a comprehensive reconciliation bill, nicknamed the “One Big Beautiful Bill,” which includes provisions like banning spread pricing in Medicaid and limiting PBM compensation for Medicare Part D to actual service fees.
In response to increasing regulatory pressure, major PBMs are adjusting their strategies. For instance, Cigna’s Express Scripts is implementing negotiated discounts directly at pharmacy counters and capping patient costs. Meanwhile, UnitedHealth’s Optum Rx has announced plans to ensure that all rebates are passed through to patients by 2028 and has already relaxed prior authorization requirements for certain chronic medications.
The ongoing developments at the FTC add another layer to the situation, with various legal actions under scrutiny. For example, litigation concerning insulin rebates facing the FTC was paused due to a commissioner’s recusal but is expected to resume soon. Additionally, Express Scripts is contesting the FTC’s 2024 report on PBMs, raising broader questions about the agency’s governance and commissioner oversight.
Turning to the state level, a surge of legislative activity showcases a growing impatience with federal inaction. States such as Massachusetts, Missouri, Utah, and North Dakota have enacted new laws impacting PBM operations, which range from establishing licensing requirements to increasing transparency around rebates and curbing spread pricing practices. Meanwhile, Michigan is advocating for the establishment of a prescription drug affordability board, and Montana is working on legislation that would implement NADAC-based reimbursement with a set dispensing fee.
Litigation is also gaining momentum as some states, including Michigan and California, initiate lawsuits against PBMs, alleging their contribution to the opioid crisis by favoring high-rebate opioid options in formularies. These cases have become a matter of jurisdictional debate, as PBMs argue for their removal to federal courts based on their association with federal programs like Tricare.
On the insulin pricing front, recent settlements and lawsuits underscore the urgency of the situation. Minnesota recently resolved a case with Novo to offer caps on insulin prices, while Massachusetts has brought allegations against PBMs and manufacturers for colluding to inflate insulin costs, violating consumer protection laws. Moreover, Maryland has expanded its Prescription Drug Affordability Board’s authority to set payment limits, anticipating potential legal challenges.
Overall, Gilboa notes that the PBM industry stands at a pivotal juncture. With heightened scrutiny from both federal and state governments, the drive for transparency, accountability, and structural reform has intensified.
Keller concluded that stakeholders within the health care sector should remain vigilant and proactive as the landscape continues to evolve rapidly. The podcast aimed to keep listeners informed on these pressing issues, inviting questions and discussions to better understand the implications for the future of PBMs.
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