Throughout 2025, Congress introduced several bills related to the pharmacy benefit management (PBM) industry. As with the 118th Congress in 2024 (see The Focus of Federal Proposals on Pharmacy Benefit Management – 118th Congress), PBM-oriented bills were often supported through bipartisan collaborations in both the House and Senate. In 2025, at least 23 bills or amendments were brought forward that either focused on PBMs or included provisions surrounding PBM administration (see Proposals in the 119th Congress below). States also continued to introduce and pass new laws surrounding PBM operations, increasing the need for interpretation at the intersection of federal healthcare laws and newly passed state provisions. 2025 also reintroduced Most Favored Nation (MFN) Pricing[1] and brought forth Direct-to-Consumer (DTC)[2] sales channels for pharmaceutical manufacturers, introducing additional complexity to the pharmaceutical supply chain.
Federal PBM Oversight Ambitions
The 119th Congress introduced a variety of bills with proposed changes that would impact current regulations across Medicare, Medicaid, Employee Retirement Income Security Act (ERISA), and the Affordable Care Act (ACA). Many of the themes were similar to previous efforts to increase transparency across the pharmacy supply chain, require reporting from PBMs to health plans (and in some cases to government authorities), eliminate ‘spread’ pricing, promote greater visibility into rebate contracting, and mitigate steerage of patients to use affiliate pharmacies. Some of the bills introduced increased oversight responsibilities of the secretary of health and human services and Federal Trade Commission (FTC) and for these authorities to gather, interpret, and report on data submitted by PBMs providing insight into their practices. Other aspects of certain bills mandated that the Government Accountability Office (GAO) conduct certain studies and that the FTC report on the role of PBMs and other intermediaries in the pharmaceutical supply chain.
While several bills were introduced throughout 2025, none moved beyond their respective constituencies in the House or Senate. Arguably, in 2025 the furthest any bill containing PBM provisions advanced was the House version of H.R. 1 (One Big Beautiful Bill Act), which was initially passed by the House and included provisions focusing on spread pricing for Medicaid and accountability of PBMs for Medicare Part D via stipulations that address PBM contracts, rebates, and other items.[3] These sections were subsequently removed during the Senate debate of H.R.1. However, not without other efforts by senators to amend H.R. 1 with PBM amendments of their own (see, for example: S.Amdt. 2670[4] S.Amdt. 2786[5], S[6]Amdt.).
State Law Implementations
While federal lawmakers’ efforts stalled, numerous states continued to pass legislation surrounding PBMs. As seen in previous years, many states are adding requirements for PBMs to be licensed to operate within their jurisdiction; require greater transparency surrounding drug pricing and rebates; and impose parameters around PBMs related to pharmacy audits, limitations or elimination of spread pricing, and Maximum Allowable Cost provisions. These types of provisions are now becoming fundamental across the nation as momentum builds around state-specific legislation. All states vary in their approaches. Some states have become very engaged (e.g., Arkansas, California, Indiana, Iowa), while other states are still relatively silent in PBM requirements (e.g., Rhode Island, Nevada). Some notable trends emerging from recently enacted state requirements include, but are [7] not limited to.
- Requirements of language and concepts that need to be addressed in contracts between PBMs and pharmacies, and PBMs and health plans. Example requirements include focus on pricing and reimbursement concepts (e.g., spread pricing,[8] pass-through[9] contracts), timeframes and conditions for reversals of claims, appeal rights for pharmacies, and notification requirements for PBMs related to contract changes.
- Limitations on preferred networks, network participation requirements, and any-willing provider concepts comparing pharmacy affiliate[10] to non-affiliated pharmacies.
- Empowering the state insurance commissioner — or similar party — to provide oversight of PBMs by requiring reporting from PBMs, implementing grievance processes for pharmacies, the authority to audit PBMs, and apply penalties when violations are identified.
- States collection of drug pricing data through pharmacy surveys or referencing pricing sources, such as National Average Drug Acquisition Cost (NADAC) and moving away from traditional avenues such as Average Wholesale Price (AWP).
Notable observations of state specific PBM laws:
Arkansas:
In April, Act 624 prevented PBMs ability to obtain pharmacy permit(s) in the state:[11]
“(b) A pharmacy benefit manager shall not acquire direct or indirect interest in, or otherwise hold, directly or indirectly, a permit under §17-92-405 for the retail sale of drugs or medicines in this state.
(c) On and after the effective date of this act, the Arkansas State Board of Pharmacy shall either revoke or not renew a permit of an entity that violates this section.”
The implementation of this law has been blocked, pending multiple lawsuits.
Iowa:
Senate File 383 was signed on June 11, 2025, and imposed a number of new provisions surrounding PBMs. Iowa implemented a specific dispensing fee amount in its new law:
“[A] pharmacy benefits manager shall reimburse the retail pharmacy or pharmacist a professional dispensing fee in the amount of ten dollars and sixty-eight cents.”[12]
The implementation of this law has been stalled by pending lawsuits challenging the state’s authority and conflicting with federal laws (e.g., ERISA).
California:
Senate Bill 41 was signed by the governor on October 11, 2025, and contained several new state PBM requirements. California included language surrounding the fiduciary duties of PBMs.
Section 4441 of the Business and Professions Code:
“A pharmacy benefit manager has a fiduciary duty to a self-insured employer plan that includes a duty to be fair and truthful toward the client, to act in the client’s best interests, to avoid conflicts of interest, and to perform its duties with care, skill, prudence, and diligence.”
Section 1385.0022 of the Health and Safety Code:
“A pharmacy benefit manager has a fiduciary duty to its payer client that includes a duty to be fair and truthful toward the payer, to act in the payer’s best interests, to avoid conflicts of interest, and to perform its duties with care, skill, prudence, and diligence. This section does not limit a payer’s obligations under applicable law with respect to the administration of health care coverage for plan participants.”
These were notable additions to California’s law considering recent cases challenging fiduciary duties involving PBMs (e.g., Lewandowski v. Johnson and Johnson et al., Navarro et al. v. Wells Fargo & Company et al.).
Georgia:
Georgia law contains provisions surrounding the qualifications of physicians administering utilization management, it states:[13]
“(a) No pharmacy benefits manager shall engage in the practice of medicine, except as otherwise provided in subsection (b) of this Code section.
(b) Any physician employed by or contracted with a pharmacy benefits manager advising on or making determinations specific to a Georgia insured in connection with a prior authorization or step therapy appeal or determination review shall:
(1) Have actively seen patients within the past five years; and
(2) Have practiced in the same specialty area for which he or she is providing advisement within the past five years.”
As individual states continue to develop their own regulatory framework surrounding PBMs, it is noteworthy that states are watching other states across the nation and proposing bills that often mimic what has passed or been proposed by others. Monitoring these trends across the country can enhance PBM and manufacturers’ proactive compliance efforts as they strive to stay abreast of factors that may influence compliance practices now and into the future, and to anticipate additional potential requirements that may emerge in other states or future federal legislative or regulatory proposals.
The Intersection of PBMs, MFN Pricing, and DTC Models
MFN pricing was first proposed by President Donald Trump in July 2020, through Executive Order (EO) 13947,[14] which was superseded by EO 13948.[15]This was subsequently rescinded after lawsuits prevented implementation. Then in 2025, Trump signed twoEOs pertinent to issue: EO 14273[16] and EO 14297.[17] A background on these EOs can be found at Most-Favored-Nation, Executive Order 14297 | Forward Looking Perspectives for Drug Manufacturers, Pharmacy Benefit Managers, Health Plans, and Pharmacies).
In relation to PBMs, EO 14273 (April 15, 2025) the Purpose summarized the efforts to lower drug prices, including during Trump’s first term, and identified certain objectives:
- Reform efforts to ensure that Government mandated discounts were passed through to patients instead of being retained by middlemen
- Improv[e] Transparency into Pharmacy Benefit Manger Fee Disclosure” for ERISA, and
- Tasking cabinet members to reevaluate the Role of Middlemen (and) provide recommendations to the President on how best to promote a more competitive, efficient, transparent, and resilient pharmaceutical value chain that delivers lower drug prices for Americans.
Meanwhile EO 14297 (May 12, 2025) was silent on PBMs or ‘middlemen’. However, EO 14297 did introduce “Direct-to-Consumer Sales to American Patients at the Most-Favored Nation Price” creating “purchasing programs for pharmaceutical manufacturers that sell their products to American patients at the most-favored-nation price.” Although the EO lacked details, this sales model appeared that it could bypass PBMs as drugs would not be dispensed through a traditional pharmacy channel.
On July 31, 2025, the White House released a fact sheet[18] as a follow-up to EO 14297 (See Ankura’s summary of the fact sheet: Most-Favored-Nation, Executive Order 14297|Forward Looking Perspectives for Drug Manufacturers, Pharmacy Benefit Managers, Health Plans, and Pharmacies). The fact sheet discussed that pharmaceutical manufacturers were not meeting the expectations of the administration in their MFN proposals, and that 17 letters were sent by President Trump to the CEOs of pharmaceutical manufacturers (July 31, 2025) with expectations of their respective companies’ cooperation surrounding MFN pricing for Medicare, Medicaid, and commercial payers by September 29, 2025. With respect to PBMs, the fact sheet stated:
“Providing manufacturers with an avenue to cut out middlemen and sell medicines directly to patients, provided they do so at a price no higher than the best price available in developed nations.”
Meanwhile the letters to the pharmaceutical manufacturer CEOs did not directly mention PBMs, but included additional language surrounding DTC and introduced a new term, Direct-to-Business:
“Provide for Direct Purchasing at MFN Pricing: Participate in Direct-to-Consumer (DTC) and/or Direct-to-Business (DTB) distribution models for high-volume, high-rebate prescription drugs so all Americans get the same low MFN prices that manufacturers already offer to third-party payers.”
This provided yet another indication that DTC would become part of the forward-looking pharmacy dispensing model, possibly circumventing the PBM.
Deadline: September 29, 2025
Pfizer was the first pharmaceutical manufacturer to, “bring American drug prices in line with the lowest paid by other developed nations,”[19] announced on September 30, 2025. AstraZeneca was next (announced October 10[20] Third was EMD Serono (October 16, 2025 [21]) Additionally, Additionally, Eli Lilly and Company and Novo Nordisk agreed to MFN pricing (announced November 6, 2025[22]). These announcements did not discuss PBMs but did discuss that the manufacturers will be providing drugs at discounted prices through DTC channels and will “provide every State Medicaid program in the country access to MFN drug prices.” Then, on December 19, 2025, an additional nine manufacturers agreed to provide every state Medicaid program with access to MFN pricing and to offer drug products to patients at a discounted rate when selling DTC through TrumpRx[23].
GENEROUS
On November 6, 2025, Centers for Medicare & Medicaid Services (CMS) announced the GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model, “bringing most-favored-nation pricing to Medicaid.”[24] Under this five-year pilot program, “manufacturers will provide supplemental rebates to participating states for drugs included in the model to align Medicaid net prices with what certain other countries pay.”[25] “Within this model, CMS will negotiate standard coverage criteria with manufacturers for each of their model drugs. Participating states will use these criteria to develop their Preferred Drug Lists (PDLs) as well as the utilization management criteria for the C[overed] O[utpatient] D[rug]s (COD).”[26]
Under the current Medicaid Drug Rebate Program (MDRP), “states receive rebates from manufacturers in exchange for coverage of manufacturers’ covered outpatient drugs” and “many states also negotiate additional supplemental rebates with drug manufacturers.” However, through GENEROUS, “the manufacturer would not be required to negotiate additional supplemental rebates for covered outpatient drugs with prices similar to what other countries pay,” changing the rebate dynamics surrounding the coverage of some drugs today. Furthermore, the GENEROUS model will allow “manufacturers and CMS [to] negotiate suggested coverage criteria for covered outpatient drugs” and “reduce a manufacturer’s burden of negotiating criteria in every state.” The aforementioned pharmaceutical manufacturers and future manufacturers that participate in GENEROUS, will “negotiate coverage terms for their drugs with CMS…. These may include suggested criteria for utilization management such as step therapy, quantity limits, and other terms for prior authorization.”[27]
For PBMs, the GENEROUS model may be impactful depending on the current contractual agreement between the Medicaid plan and the PBM. GENEROUS removes rebate negotiations between the manufacturers and PBMs/Medicaid plans occurring under the current model. It also shifts the development of coverage criteria to CMS and the manufacturer (“with state input”[28]) commonly a product of PBM/Medicaid plan formulary management. Both tasks were often revenue generating responsibilities of the PBM. Another complexity is that drugs will also adjudicate at point-of-sale using a contracted rate between the PBM and the pharmacy, which in the future state may need to align with MFN pricing compared to current reimbursement calculations (based on AWP, WAC).
States are required to “invoice manufacturers for supplemental rebates for the COD for the calendar quarter within 60 days of the end of each calendar quarter.”[29] This data will be based on dispensing data that will likely be generated, stored, and retrieved from the PBM by the Medicaid plan. These duties will need to be defined in future contracts between PBMs and plans.
PBM Price Transparency and Accountability Act
Finally, the PBM Price Transparency and Accountability Act[30] was recently introduced with bipartisan support. A similar plan was packaged in December 2024’s “Further Continuing Appropriations and Disaster Relief Supplemental Appropriations Act, 2025,” which was drafted to keep the federal government from a shut down. According to a draft of the bill released by the Senate Finance Committee, the legislation would impose specific requirements on PBMs operating within Medicare Part D prescription drug plans, including detailed reporting obligations. It would delink PBM compensation from negotiated rebates to reduce incentives for promoting higher-priced medications. The legislation reinforces existing requirements that plan sponsors contract with any willing pharmacy meeting standard terms. The bill requires retail community pharmacies to participate in the National Average Drug Acquisition Cost survey, ensuring accurate Medicaid payments to pharmacies. It also mandates that PBMs pass Medicaid payments directly to pharmacies.
Closing out 2025, Ringing in the New Year!
A lot has happened in 2025. Considering the nation’s attention around drug pricing and the pharmaceutical supply chain, 2026 will likely continue to bring more PBM legislation, new drug pricing concepts, and new drug delivery channels. Ankura’s Healthcare & Life Sciences professionals will continue to monitor these critical health policy issues as they unfold and advise our industry clients as we assess the impact upon strategy, operations, and compliance commitments. Please contact our experts to discuss ways that we may be able to assist.
Proposals 119th Congress (Considered for this Article)
H.R. 267 | Health Care PRICE Transparency Act | 1/9/2025 | Rep. Warren Davidson
H.R. 497 | Medicaid Third Party Liability Act | 1/16/2025 | Rep. Dan Crenshaw
H.R. 950 | Saving Seniors Money on Prescriptions Act | 2/4/2025 | Rep. Greg Landsman
S. 526 | Pharmacy Benefit Manager Transparency Act of 2025 | 2/11/2025 | Sen. Chuck Grassley
S. 527 | Prescription Pricing for the People Act of 2025 | 2/11/2025 | Sen. Chuck Grassley
H.R. 1768 | Lower Costs for Everyday Americans Act | 3/3/2025 | Rep. Frank Pallone
S. 891 | Bipartisan Health Care Act | 3/6/2025 | Sen. Ron Wyden
S. 882 | Patients Before Middlemen Act | 3/6/2025 | Sen. Marsha Blackburn
S. 927 | Protecting Pharmacies in Medicaid Act | 3/11/2025 | Sen. Peter Welch
H.R. 2214 | DRUG Act | 3/18/2025 | Rep. Mariannette Miller-Meeks
S. Amdt. 2561 to S. Amdt. 2360 | 6/29/2025 | Sen. Jeanne Shaheen
S. Amdt. 2670 to S. Amdt. 2360 | 6/30/2025 | Sen. Jeanne Shaheen
S. Amdt. 2786 to H.R. 1 | 6/30/2025 | Sen. Chuck Grassley
S. Amdt. 2789 to H.R. 1 | 6/30/2025 | Sen. Chuck Grassley
H.R. 4317 | PBM Reform Act of 2025 | 7/10/2025 | Rep. Buddy Carter
H.R. 4409 | Fair Pharmacies for Federal Employees Act of 2025 | 7/15/2025 | Rep. Raja Krishnamoorthi
S. Amdt. 3384 to S. 2296 | 7/31/2025 | Sen. Chuck Grassley
S. Amdt. 3385 to S. 2296 | Prescription Pricing for the People Act of 2025 | 7/31/2025 | Sen. Chuck Grassley
H.R. 5256 | 340B ACCESS Act | 9/10/2025 | Rep. Buddy Carter
S. 2770 | Share the Savings with Seniors Act | 9/11/2025 | Sen. John Cornyn
H.R. 5582 | Patients Deserve Price Tags Act | 9/26/2025 | Rep. John James
H.R. 2450 | Prescription Drug Transparency and Affordability Act | 3/27/2025 | Rep. Kristen McDonald Rivet
S. 3345 | A bill to amend titles XVIII and XIX of the Social Security Act to ensure accurate payments to pharmacies under Medicaid and prevent the use of abusive spread pricing in Medicaid, and to assure pharmacy access and choice for Medicare beneficiaries and modernize and ensure PBM accountability under Medicare. | 12/4/2025 | Sen. Mike Crapo
Sources
[1] See for example: EO 14297, https://www.federalregister.gov/documents/2025/05/15/2025-08876/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients
[2] Ibid
[3] https://www.congress.gov/congressional-record/volume-171/issue-86/house-section/page/H2235-2334
[4] https://www.congress.gov/amendment/119th-congress/senate-amendment/2670/text
[5] https://www.congress.gov/amendment/119th-congress/senate-amendment/2786/text
[6] https://www.congress.gov/amendment/119th-congress/senate-amendment/2789/text
[7] It is recommended that organizations review each state’s regulatory requirements and interpret them according to the organization’s line of business and interpretation of how each respective state’s requirements may or may not impact the organization’s business. These are summaries of topics and themes observed by Ankura and not a comprehensive evaluation of each state’s regulatory approach. State specific topics are listed from an observational perspective and does not warrant an opinion or demonstrate that the concept is unique to only that specific state if the name of the state is mentioned.
[8] Definitions will vary. Spread pricing is when a PBM reimburses a pharmacy for dispensing a drug at a particular rate then charges a different rate to the health plan for the service that was performed by the pharmacy. The difference (aka “spread”) is retained by the PBM.
[9] Definitions will vary. California SB 41 defined “Passthrough pricing model” [as] a payment model used by a pharmacy benefit manager in which the payments made by the health care service plan or health insurer client to the pharmacy benefit manager for the covered outpatient drugs are both of the following:
(1) Equivalent to the payments the pharmacy benefit manager makes to a pharmacy or provider for those drugs, including any contracted professional dispensing fee between the pharmacy benefit manager and its network of pharmacies. That dispensing fee would be paid if the health care service plan or health insurer was making the payments directly.
(2) Passed through in their entirety by the health care service plan or health insurer client or by the pharmacy benefit manager to the pharmacy or provider that dispenses the drugs, and the payments are made in a manner that is not offset by any reconciliation.
[10] Definitions will vary. Indiana defined “pharmacy affiliate” [as] a pharmacy, including a specialty pharmacy, that directly or indirectly, through one (1) or more intermediaries: (1) owns or controls; (2) is owned or controlled by; or (3) is under common ownership or common control with; an insurer, a pharmacy benefit manager, or other administrator of pharmacy benefits.
[11] Act 624. https://arkleg.state.ar.us/Home/FTPDocument?path=%2FACTS%2F2025R%2FPublic%2FACT624.pdf
[12] Section 510B.8B.3.
[13] Official Code of Georgia Annotated 33-64-4.
[14] https://www.federalregister.gov/documents/2020/09/18/2020-20887/lowering-drug-prices-by-putting-america-first
[15] https://www.federalregister.gov/documents/2020/09/23/2020-21129/lowering-drug-prices-by-putting-america-first
[16] https://www.federalregister.gov/documents/2025/05/15/2025-08876/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients
[17] https://www.federalregister.gov/documents/2025/05/15/2025-08876/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients
[18] https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-announces-actions-to-get-americans-the-best-prices-in-the-world-for-prescription-drugs/ (“Fact Sheet”)
[19] https://www.whitehouse.gov/fact-sheets/2025/09/fact-sheet-president-donald-j-trump-announces-first-deal-to-bring-most-favored-nation-pricing-to-american-patients/
[20] https://www.whitehouse.gov/fact-sheets/2025/10/fact-sheet-president-donald-j-trump-announces-second-deal-to-bring-most-favored-nation-pricing-to-american-patients/
[21] https://www.whitehouse.gov/fact-sheets/2025/10/fact-sheet-president-donald-j-trump-announces-actions-to-lower-costs-and-expand-access-to-in-vitro-fertilization-ivf-and-high-quality-fertility-care/
[22] https://www.whitehouse.gov/fact-sheets/2025/11/fact-sheet-president-donald-j-trump-announces-major-developments-in-bringing-most-favored-nation-pricing-to-american-patients/
[23]Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Genentech, Gilead Sciences, GSK, Merck, Novartis, and Sanofi are the latest companies to announce lower prescription drug prices, including through providing certain drugs at MFN to every State Medicaid program https://www.whitehouse.gov/fact-sheets/2025/12/fact-sheet-president-donald-j-trump-announces-largest-developments-to-date-in-bringing-most-favored-nation-pricing-to-american-patients/.
[24] https://www.cms.gov/newsroom/press-releases/cms-announces-new-drug-payment-model-strengthen-medicaid-better-serve-vulnerable-americans
[25] https://www.cms.gov/priorities/innovation/innovation-models/generous
[26] GENEROUS Model. Request for Applications from Applicable Manufacturers. Version: 1.2. Last Modified: November 14, 2025. (https://www.cms.gov/files/document/generous-rfa.pdf)
[27] Ibid. Page 8.
[28] Ibid. Page 8.
[29] Ibid. Page 9.
[30] https://www.congress.gov/bill/119th-congress/senate-bill/3345
© Copyright 2025. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
