State legislatures target PBM ownership 

A highlight of The Merry Adventures of Robin Hood is the Nottingham Town shooting match. After contestants take repeated aim at the bullseye, Robin Hood wins with a shot that splits a rival’s arrow. Metaphorically, states continue to take direct aim at Pharmacy Benefit Manager practices in an effort to control prescription drug costs. In recent years, laws have hit their mark in areas like reimbursement practices, contracting, network adequacy, and transparency.

Last year, Arkansas found a new target, which several states have in their sights this year: prohibiting PBM control or ownership of pharmacies. Act 624 became law in April 2025 and prohibited PBMs from having a direct or indirect ownership interest in a pharmacy operating in Arkansas. By late July, a preliminary injunction stopped the law from taking effect, primarily based on the Commerce Clause of the US Constitution. The case is now before the 8th Circuit Court of Appeals. For details, see the Roundup of selected state health developments, third-quarter 2025.

The competition did not end. In fact, more competitors have joined the fray. The legislative concern is vertical integration in the prescription drug supply chain, a headline grabber in February at a US House hearing on lowering healthcare costs. In most cases, the state board of pharmacy is charged with enforcement through its existing pharmacy licensing authority. Pending bills include:

• Arizona. SB 1545 broadly defines PBMs to include PBM subsidiaries and entities with a direct or indirect ownership interest in a PBM. A limited permit could be issued for rare, orphaned, or limited distribution drugs, and an exemption would extend to a pharmacy employer that is the sole Arizona client of a PBM.
• Louisiana. HB 919 is a comprehensive bill that imposes reimbursement and fiduciary obligations on PBMs in addition to labeling PBM ownership of pharmacies as an unfair and deceptive trade practice.
• Minnesota. HB 2779/SB 2939 would take a gentler approach, requiring healthcare entities to report their ownership interests, business structure, financial condition, and other relevant information annually to the commerce department. Healthcare entities include insurers, PBMs, healthcare facilities, and providers. The reports would become publicly available.
• New Jersey. Two bills target distinct aspects of vertical integration. SB 3381 would bar a PBM from having a direct or indirect interest in a permit to operate a pharmacy practice site. SB 377 would prevent an insurer from having a PBM license.
• New York. Two pairs of twin bills are notable. AB 9184/SB 9191 would bar ownership or control of any combination of a pharmacy, PBM, or insurer. Applicable entities would have three years to divest their ownership interest. The same prohibition would apply under AB 6546/SB 9222, except that insurers are omitted.
• Oklahoma. The preamble in HB 3538 describes the status quo as “’a fox guarding the henhouse’ by being both a price setter and price taker.” Its provisions largely mirror those in the Arizona bill.
• Tennessee. HB 1959/SB 2040 would stop entities from using corporate structuring, intermediary ownership, management contracts, leases, or other indirect means to evade the proposed law banning PBMs from owning a pharmacy license. The scope specifically includes nonresident pharmacies with a Tennessee license, including mail-order pharmacies.
• Vermont. Limited details are available on HB 156.

So far, Louisiana, Minnesota, Oklahoma, and Tennessee have advanced their bills out of committee, and time is starting to run out in an election year. Most legislatures will adjourn before Independence Day, but given the Arkansas experience last year, enactment of any of these laws will only be the continuation of the shooting match.