5 States Driving PBM Reform in 2026

All 50 states have enacted some sort of pharmacy benefit manager (PBM) legislation, but a handful are setting the pace in terms of new laws targeting ownership restrictions, transparency requirements, and compensation models.

Rapidly evolving state-level PBM reform has created a complex and often fragmented policy landscape that healthcare leaders must actively monitor. AMCP's State PBM Reform Inventory tracks each state’s acceptance of certain PBM reforms, helping health plans and manufacturers understand the state dynamics impacting drug pricing, rebate structures, formulary design, and patient access.  

While state approaches differ, the enactments of these five states illustrate the mix of incremental and ambitious reforms being pursued across the country.

Arkansas
Arkansas has emerged as one of the nation's most closely watched states for PBM reform. In 2025, Arkansas enacted Act 624, the first law in the country to prohibit PBMs from owning or operating retail pharmacies. The measure complements Arkansas' already extensive framework governing PBM licensing, reporting requirements, spread pricing, rebate pass-through, pharmacy reimbursement, patient steering, and pharmacy contracting standards. Implementation of Act 624 has attracted national attention and prompted significant operational changes for affected organizations, while also becoming the subject of ongoing legal challenges. Regardless of the litigation's outcome, Arkansas has established a new policy framework that lawmakers in several other states are now evaluating as they consider future PBM reforms. According to AMCP’s state legislation tracker, lawmakers in 13 states have introduced bills targeting vertical integration in the pharmaceutical supply chain this term. Tennessee enacted the FAIR Rx Act earlier this year, which would require PBMs to divest from any pharmacy by January 1, 2027.

California 
California’s SB 41 establishes a comprehensive PBM reform framework that reshapes financial incentives across the pharmaceutical supply chain. The law adopts a bona fide service fee, or delinking, model that separates PBM compensation from drug prices and limits income to fair market value service fees. It also phases out spread pricing in PBM contracts beginning in 2026 and requires PBMs to pass all rebates through to payers. SB 41 caps insulin copays at $35 per month and prohibits patient cost sharing above a drug’s actual or net price. The law also expands oversight by requiring PBM licensure, quarterly drug cost and utilization reports, and regular financial reporting to state regulators.

Iowa 
Iowa has rapidly expanded its PBM regulatory framework over the past two legislative sessions, making it one of the most active states in the Midwest on pharmacy benefit reform. Recent legislation strengthened requirements related to rebate pass-through, pharmacy reimbursement standards, patient steering protections, and pricing transparency, while also enhancing oversight of pharmacy network practices. Rather than pursuing a single sweeping reform, Iowa has adopted an incremental approach, building upon existing statutes to address multiple aspects of the pharmacy benefit ecosystem. The result is one of the country's more comprehensive state-level frameworks governing PBM operations and pharmacy relationships, a milestone that remains under legal review as a preliminary injunction plays out.

North Carolina
North Carolina has focused on strengthening accountability and oversight while expanding protections for patients and network pharmacies. The state's policy framework includes PBM licensing requirements, transparency reporting, pharmacy reimbursement standards, patient access protections, and fiduciary responsibilities that establish clear expectations for PBM business practices. Recent legislative proposals have continued to build on these foundations by exploring additional transparency requirements, reimbursement standards, and oversight mechanisms. One recent reform pioneered by the state is promoting patient access in “pharmacy deserts” by establishing minimum reimbursements tied to the pharmacy’s acquisition cost. North Carolina's approach reflects a broader trend among states toward modernizing existing PBM statutes rather than relying on a single comprehensive reform package.

Texas
Texas established a PBM regulatory framework in 2021 that centers on licensure, transparency, and protections for network pharmacies. Texas differs from most states in that PBMs are regulated as third-party administrators, and they must submit annual pharmacy benefit reports to remain certified with the Department of Insurance. PBMs are prohibited from steering patients to affiliated pharmacies or from offering unaffiliated pharmacies lower reimbursement. Starting in 2026, PBMs must comply with new network pharmacy contract transparency requirements and may not make adverse material changes during the term of a contract. Texas was one of the first states to require PBMs to apply all payments toward an individual's cost-sharing requirements, including manufacturer-sponsored patient assistance funds.

Taken together, these states demonstrate that there is no single blueprint for PBM reform. Instead, policymakers continue to experiment with different combinations of transparency, reimbursement, pricing, ownership, and patient protection policies to address evolving healthcare priorities.

For health plans, shifting regulations may impact cost management strategies and operational models, while pharmaceutical companies must adapt to changing market access pathways and compliance requirements. Staying informed enables more strategic decision-making, helping organizations anticipate risk, identify opportunities, and respond effectively to a continually changing environment.

Explore AMCP's State PBM Reform Inventory to compare PBM legislation across all 50 states and download the latest state-by-state analysis.