State lawmakers file pharmacy benefit managers reform bills

Amid multiple lawsuits against pharmacy benefit managers, a pair of bills have been filed in the 2026 Missouri legislative session seeking to bring transparency and fair pricing to the prescription drug system.

Both House Bill 1850, sponsored by Rep. John Hewkin, R-Cuba, and Senate Bill 984, sponsored by Sen. Jill Carter, R-Granby, aim to modify definitions and regulations related to PBMs. PBMs serve as intermediaries between prescription drug manufacturers and health insurance providers. Their primary functions include negotiating rebates and discounts with drug manufacturers, managing prescription drug benefits, processing pharmacy claims and creating drug formularies to control drug spending.

However, government scrutiny has led to allegations of price-fixing and vertical integration among PBMs – issues that Carter said she wants to help address with her bill. Three companies control nearly 80% of U.S. pharmacy benefit management, according to a 2024 U.S. Federal Trade Commission report subtitled “The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies.” The three PBMs are owned by companies that also offer insurance and other health care services. CVS Health (NYSE: CVS) owns Caremark, Cigna Group (NYSE: CI) owns Express Scripts and UnitedHealth Group Inc. (NYSE: UNH) owns OptumRx.

“The bill that I filed is a transparency bill,” Carter said. “Essentially, PBMs have to disclose the cost that they are passing on or that they are paying for the prescription. If you spend a little bit of time in independent pharmacies, you’ll also learn oftentimes it is costing them more to fill the prescription than it is for them to not.

“It’s really putting the squeeze on these independent pharmacists and on the consumers because there’s no transparency in the real cost,” she added.

Carter said she wants the prescription drug system to provide transparency in ensuring the consumer knows the true cost of the prescription they are receiving. The bill further seeks to ensure PBMs “are negotiating in the best interest of the consumer, who has insurance and is trying to provide the coverage and benefits for their employees,” she said.

The bill requires PBMs to give employers and the Missouri Department of Insurance full pharmacy claims data and assigns a fiduciary duty to them. It also prohibits PBMs from charging patients a higher copay than the actual price of the medication and ensures pharmacies are reimbursed the cost of a drug as well as the same dispensing fee allowed by Medicaid.

The act also adds several provisions relating to contracts between PBMs and pharmacies, including providing plan sponsors with pharmacy claims data and submitting documentation of any benefit design that encourages or requires the use of affiliated pharmacies.

Government activity
Mike Stuart is a board member of the Missouri Pharmacy Business Council, a group representing independent pharmacies and a supporter of the legislation. Stuart also is owner and president of Lakeland Pharmacy, a Branson West-based independent pharmacy chain founded in 1998. Stuart said most of its locations, which include Branson, Crane and Willow Springs, have been open for over 20 years.

“Every state around us has had legislation passed to try to rein in some of the PBM abuses,” Stuart said, noting Arkansas last year passed House Bill 1150, which bans PBMs from engaging in anticompetitive practices by simultaneously owning pharmacies. “Missouri’s the only one that has not got anything passed to restrict their abuses.”

The federal government also is taking aim at PBMs as part of a new health care plan announced earlier this month by the Trump administration. President Donald Trump said he plans to eliminate kickbacks involving PBMs as part of the Great Healthcare Plan, which is aimed at lowering drug prices and insurance premiums while holding large insurance companies accountable and increasing price transparency.

“I’m encouraged because I’m seeing a lot of movement, not just in this state,” Stuart said of support for Missouri legislation targeting PBM reform. “Nationally, we’re seeing it. I think people are finally starting to understand that the majority of the price increases that are happening for their drugs is caused by the rebate system that has been set up by the PBMs.”

Washington, D.C.-based Pharmaceutical Care Management Association is the national organization representing America’s pharmacy benefit companies. PCMA officials say there are more than 70 PBMs nationally. While declining an interview for this story, PCMA officials sent a statement from Philip Christofanelli, senior director of state affairs and a former Missouri lawmaker

“Pharmacy benefit managers are the only participants in the drug supply chain dedicated to lowering the cost of prescription drugs in Missouri,” Christofanelli said in the statement. “More than 70 PBMs compete vigorously to secure savings for patients and employers – negotiating to lower the high drug prices that pharmaceutical companies alone set.”

Missouri’s SB 984 “would impose onerous new mandates that will undermine this work and increase health care costs for everyone,” he said in the statement, adding Missouri lawmakers would be wise to reject the bill.

Legal fire
PBMs have come under legal fire as the city of Springfield recently joined a growing list of parties that have filed suit against major pharmaceutical companies over an alleged price-fixing scheme for diabetes medications such as insulin.

The Springfield municipality’s lawsuit was filed Jan. 13 in the U.S. District Court for the Western District of Missouri’s Southern Division in Springfield, according to past Springfield Business Journal reporting. The defendants include manufacturers Eli Lilly and Co., Sanofi and Novo Nordisk, as well as PBMs CVS Caremark, Express Scripts and OptumRx. Similar lawsuits have been filed by Springfield-based auto parts retailer O’Reilly Automotive Inc. (Nasdaq: ORLY), Bolivar-based Ozarks Schools Benefits Association and Missouri Attorney General Catherine Hanaway.

Stuart said PBMs “need to be reined in” and just handle the transaction between pharmacists and the consumer, which he added was their original purpose.

“Instead, they have created a position in the middle where they’re making tons of money, and they don’t bring any value to the whole health care system,” he said, adding if PBMs were eliminated it would increase competition among pharmaceutical manufacturers. “The manufacturers are being held hostage to these PBMs. So, if they don’t play along with them and give them these rebates, then their products don’t get on the formularies.”

Carter said her bill has no intention of getting rid of PBMs but said transparency is always a good equilibrium to understand what’s happening in government. She is hopeful that Missouri legislators can get the bill passed this session.

“It’s awfully difficult to fight against a transparency bill,” she said. “It’s awfully hard to say you don’t need transparency.”