States seek to lower drug prices by targeting the companies that manage them for health plans

June 27, 2026 - 05:22

Lawmakers in more than a dozen states are advancing bills aimed at reining in the pharmacy benefit managers that negotiate drug prices for health plans. These companies, often called PBMs, sit between insurers, drugmakers, and pharmacies, and critics say they drive up costs for patients while pocketing hidden fees.

The push comes as prescription prices remain a top concern for voters. PBMs have long argued they help lower costs by negotiating discounts, but recent investigations show they often keep those savings for themselves. Some states now want to ban a practice called "spread pricing," where PBMs charge health plans more than they pay pharmacies and keep the difference.

Other proposals would force PBMs to pass 100 percent of rebates back to patients at the pharmacy counter. A few states are also considering licensing requirements and transparency rules that would require PBMs to disclose how much they make on each transaction.

The pharmaceutical industry has supported some of these efforts, seeing them as a way to shift blame away from drug manufacturers. But PBM trade groups warn that heavy regulation could lead to higher premiums or fewer pharmacy options for consumers.

Federal action has stalled, leaving states to take the lead. At least 20 states have introduced or passed PBM reform laws this year alone. The outcome could reshape how millions of Americans pay for their medications, especially those with chronic conditions who rely on expensive brand-name drugs.

Critics say the real fix must come from Washington, but for now, statehouses are the battleground. The debate is likely to intensify as more patients struggle to afford their prescriptions.