State-Level PBM Reform: The Real Path to Fixing Pharmacy Reimbursement

Drug Topics – Online Article – April 3, 2026

Pharmacy benefit manager (PBM) reform has become a national priority. However, while federal efforts continue to evolve, state-level reform is emerging as the most immediate and effective path forward.

Across the country, independent pharmacies are struggling under reimbursement models that often pay below the cost of dispensing medications. As a result, sustainability—and patient access—is increasingly at risk.

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The Reality: Pharmacies Paid Below Cost

For many pharmacies, the financial model simply does not work.

As explained by pharmacist Benjamin Jolley, PharmD, reimbursement contracts with PBMs can result in pharmacies being paid 10% below their acquisition cost for brand-name drugs.

In practical terms, this means:

• Pharmacies lose money on prescriptions

• Patient care becomes financially unsustainable

• Independent pharmacies face closure

This growing crisis has been described as the “PBM Hunger Games”—a system where survival is becoming increasingly difficult for community pharmacies.

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Why PBMs Are Under Scrutiny

PBMs play a central role in the prescription drug supply chain. However, critics argue that their business practices lack transparency and create misaligned incentives.

Key concerns include:

• Opaque pricing models and hidden rebates

• Spread pricing, where PBMs charge payers more than pharmacies receive

• Patient steering to PBM-owned pharmacies

• Below-cost reimbursement structures

At the same time, market consolidation has intensified the issue. The top three PBMs—OptumRx, Express Scripts, and CVS Caremark—now control nearly 80% of all prescription drug claims.

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Federal Reform: Progress, But Slow

At the federal level, reforms are underway—but they will take time.

The Consolidated Appropriations Act of 2026 introduces:

• Drug-level reporting requirements

• Mandatory rebate pass-through to employer plans

• Increased transparency in PBM compensation

In addition, the Federal Trade Commission (FTC) and Department of Labor are pursuing actions to hold PBMs more accountable.

However, most of these reforms will not be fully implemented until 2029.

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Why States Are Leading the Way

Because federal change is slow, states have become the primary drivers of meaningful PBM reform.

Several states are already taking action:

Price Floor Legislation

States like Colorado, Iowa, and Louisiana now require PBMs to reimburse pharmacies at:

• At least the acquisition cost of the drug

• Plus a professional dispensing fee

This ensures pharmacies are not losing money on prescriptions.

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Fighting Patient Steering

States such as Arkansas and Tennessee are addressing:

• “Ghost networks”

• Mandatory use of PBM-owned pharmacies

• Restrictions on patient choice

These reforms aim to protect both pharmacies and patients from anti-competitive practices.

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Medicaid Reform Models

Some states are also exploring:

• Single-PBM models

• Fee-for-service structures

These approaches are designed to eliminate spread pricing and improve transparency in government-funded programs.

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Industry Pushback and Ongoing Debate

Not surprisingly, PBM industry groups argue that these reforms may limit their ability to negotiate lower drug prices.

However, many policymakers and pharmacists counter that the current system lacks transparency and unfairly shifts financial risk onto pharmacies.

As awareness grows, momentum continues to build for reform at both the state and federal levels.

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What This Means for Access to Care

Ultimately, this is not just a pharmacy issue—it is a patient access issue.

When pharmacies are forced to close or limit services:

• Patients lose access to medications

• Rural and underserved areas are hit hardest

• Delays in care increase

State-level reform is helping stabilize pharmacy operations, which in turn protects access to care.