FAQ: State PBM reform in 2026—What's new since spring

State lawmakers have kept passing pharmacy benefit manager (PBM) reform legislation through 2026, from rebate pass-through requirements to bans on spread pricing. This FAQ builds onto Managed Healthcare Executive’s April explainer on PBM reform basics with what's changed since, including the specific state laws enacted, and the compliance questions those laws raise for plans and PBMs.

Theresa Carnegie, a healthcare and pharmaceutical supply chain member in Mintz's health law practice, reviewed and weighed in on several of the questions below. Additional information is based on published legislative tracking and industry sources.

Carnegie's answers are trimmed for length.

1. What's changed on state PBM reform since MHE last covered it in the spring?

State activity has continued to accelerate. Delaware became the latest state to act when Gov. Matt Meyer signed SB 271 in September, following a run of major laws earlier in the year in Arkansas, California, Iowa, North Carolina and Texas. Lawmakers cite pharmacy closures, spread pricing and rebate opacity as reasons for the continued push, according to Mintz's ongoing tracking of state PBM bills.

2. Which states have enacted major PBM reform laws in 2026?

Arkansas, California, Iowa, North Carolina and Texas are among the states with significant 2026 PBM legislation, according to the Academy of Managed Care Pharmacy (AMCP). California's SB 41 phases out spread pricing and requires full rebate pass-through to payers, Arkansas's Act 624 bars PBMs from owning or operating retail pharmacies and North Carolina ties minimum pharmacy reimbursement to acquisition costs in areas with limited pharmacy access. Additionally, Delaware added to the list in September, when Gov. Matt Meyer signed SB 271, which limits pharmacy audits to once every 12 months and bars PBM retaliation against pharmacies that file complaints.

3. What do these laws typically require PBMs to do?

Most 2026 state laws fall into a few categories, according to Mintz's legislative tracking. These categories include requiring PBMs to report rebates, fees and other compensation to regulators and plan sponsors; directing manufacturer rebates to payers or patients rather than letting PBMs retain them; banning practices such as spread pricing and patient steering toward PBM-affiliated pharmacies and giving state insurance departments stronger audit and enforcement authority, including civil penalties.

4. How does state PBM reform interact with federal PBM transparency rules, like those in the 2026 Consolidated Appropriations Act?

There is no single, formal “federal Part D transparency rules” law, according to Carnegie. The relevant federal statute is the 2026 Consolidated Appropriations Act (CAA), which includes PBM transparency requirements covering both the commercial market and Medicare Part D. State PBM laws apply to commercial and state-regulated markets, while the CAA's Part D provisions fall under CMS oversight, and state laws tend to cover a broader range of PBM activities, such as licensure and pharmacy reimbursement.
Many state and federal transparency requirements, including rebate pass-through and spread-pricing disclosure, are complementary rather than conflicting since they target different populations, though PBMs operating in both markets must comply with both sets of rules across all 50 states, Carnegie said.

5. Are self-funded employer plans (ERISA plans) subject to state PBM laws?

According to Carnegie, it all depends. ERISA generally preempts state laws that “relate to” employee benefit plans, exempting self-insured employer plans from state insurance regulation. However, the U.S. Supreme Court's unanimous 2020 ruling in Rutledge v. Pharmaceutical Care Management Association held that ERISA does not preempt state laws regulating the reimbursement rates PBMs pay pharmacies, since that counts as “cost regulation” rather than plan administration.

Nearly all states have used that ruling to enact PBM laws focused on licensure, pharmacy reimbursement and price transparency. Courts have drawn a line elsewhere, though. For example, the 10th Circuit's ruling in PCMA v. Mulready found that provisions governing network access, discount prohibitions and “any willing provider” rules are preempted because they touch plan administration directly, and litigation over exactly where that line falls is still ongoing, Carnegie said.

6. What happens if a PBM doesn't comply with a new state law?

Enforcement varies by state, but most PBM laws run through the state Department of Insurance, which can investigate complaints, conduct audits and impose penalties, Carnegie said. Common consequences include civil fines that can run from roughly $1,000 to $25,000 per violation depending on the state, suspension or revocation of a PBM's license to operate in that state and corrective action orders requiring contract changes or reimbursement to affected pharmacies or plans.

Some state laws also create a private right of action, letting pharmacies, plans or even consumers sue a noncompliant PBM directly, or give pharmacies and plans the right to terminate their PBM contract without penalty, Carnegie added.

7. How are PBMs and their trade groups responding to this wave of legislation?

The Pharmaceutical Care Management Association (PCMA), the PBM industry's main trade group, has pushed back on the narrative driving much of this legislation, arguing that drugmakers, not PBMs, are primarily responsible for high list prices through practices such as patent abuse and pay-for-delay deals. PCMA's recent public statements have focused more on federal legislation than on individual state bills, but the same broader argument, that PBM negotiation lowers costs and that reform proposals misdiagnose the problem, underlies its response to the state-level wave as well.

8. What should plans and PBMs operating in multiple states do to prepare?

Multi-state PBMs and plan sponsors need a systematic approach, according to Carnegie. She suggested cataloging every state where they operate, tracking each state's specific requirements and effective dates, and reviewing existing PBM-plan and PBM-pharmacy contracts for compliance with new mandates.

A key strategic decision is whether to apply the most strict state requirements across the board for operational simplicity or build tailored state-by-state compliance protocols, weighing efficiency against the cost of over-compliance. Plan sponsors should also coordinate closely with their PBMs on how state-specific compliance is being handled and what contractual protections to require, Carnegie said.

9. How would the federal reform interact with state laws?

The 2026 CAA enacted federal PBM reform requiring 100% rebate pass-through, transparency and reporting, audit rights, and limits on PBM compensation beyond bona fide service fees, Carnegie said. The Department of Labor has separately proposed a rule requiring PBMs to disclose their compensation, including manufacturer rebates, copay clawbacks and spread pricing, directly to employer plan clients.

Together with the state law patchwork, these federal requirements create real compliance challenges for PBMs navigating disparate, sometimes conflicting rules and additional PBM bills remain pending in Congress beyond the CAA, Carnegie said.

Carnegie approved of this full FAQ for accuracy.