States with Current PBM Legislation

Iowa recently enacted a law (Senate File 383) that forbids PBMs from steering patients toward certain pharmacies, requires reimbursement to any pharmacy at or above acquisition cost (plus a dispensing fee), and mandates pass-through of rebates rather than allowing PBMs to pocket them. (Healthcare Dive)
As a result, patients in Iowa should have more freedom to choose which pharmacy fills their prescriptions — not forced to use PBM-owned or PBM-preferred pharmacies — which helps preserve independent and rural pharmacies that otherwise might close under unfavorable reimbursement terms. (Definitive Healthcare)

In 2025 Arkansas passed (and the governor signed) legislation — HB 1150 — that bars PBMs from owning or operating retail or mail-order pharmacies in the state. That vertical-integration ban is designed to prevent conflicts of interest and “self-dealing,” ensuring independent pharmacies have a fair chance to operate. (Rightway)
This separation aims to protect patient access to local, community-based pharmacies, allowing patients to choose their preferred pharmacy rather than being funneled to PBM-affiliated outlets. (LUGPA)

Ohio eliminated “spread-pricing” in its Medicaid managed-care contracts: the state prohibits plans from contracting with PBMs that use that pricing model. Instead, Ohio moved toward a “single PBM” or transparent, pass-through pricing model for Medicaid. (NCSL)
This helps ensure that reimbursement and rebates are transparent — which reduces perverse incentives — and helps support community pharmacies by making payments more predictable and fair. (NCSL)

Kentucky’s reforms included requiring a single PBM for Medicaid and enforcing fair reimbursement rates, including dispensing fees per prescription filled. According to the state reports, this has generated substantial cost savings — which suggests a more sustainable, transparent system that supports patient access and pharmacy viability. (Nevada PPC)

In 2025 California passed Senate Bill 41 — a PBM-delinking and transparency law. The law changes how PBMs are compensated (moving away from incentives based on drug price) and prohibits certain practices like “steering” patients toward certain pharmacies. (Wikipedia)
By reducing conflicts of interest in PBM compensation and limiting steering, SB 41 aims to preserve patient autonomy in choosing pharmacies and encourage fair competition among pharmacies, including independents and community-based providers. (MultiState)

In 2025 Illinois passed a bill — HB 1697 — regulating PBMs: among its provisions, it imposes a fee on PBMs to fund grants supporting independent pharmacies in underserved areas, and requires audit rights for plan sponsors. It also bans PBMs from using overly broad definitions to limit access to specialty medications. (Ogletree)
These reforms are meant to support pharmacies in underserved or rural areas, reduce unfair restrictions on medication access, and preserve patient choice over where they receive specialty medications — not just through large PBM-owned mail-order pharmacies. (Ogletree)

What These Laws Actually Do — and Why It Matters

Reform Feature / Regulatory Change	What It Enables for Patients & Communities
Prohibiting PBM ownership of pharmacies	Prevents vertical integration so PBMs can’t steer patients to their own pharmacies — supports independent/local pharmacies. (Arkansas, Iowa, California)
Banning “steering,” allowing patients to choose pharmacy	Patients keep the right to pick which pharmacy fills their prescriptions rather than being funneled to a mail-order or PBM-owned outlet. (Iowa, California, Illinois)
Requiring fair reimbursement & dispensing fees, preventing underpayment	Helps independent and rural pharmacies stay financially viable, preserving local access. (Iowa, Kentucky, Ohio)
Mandating transparency of rebates, fees, pricing models (“pass-through” pricing)	Makes the supply chain more open; reduces incentive-driven distortions, potentially lowering drug costs and preserving competition. (Ohio, California, Illinois, other states)
Funding support for pharmacies in underserved/rural areas	Ensures underserved communities don’t lose pharmacy access — even where market pressures are intense. (Illinois, Kentucky)

Not all reform efforts succeed without pushback. For instance, the law in Arkansas banning PBM ownership of pharmacies is currently subject to lawsuits from large PBMs/pharmacy-chains. (AP News)
Variation across states means that patient choice is still very uneven depending on geography. Residents in states without robust PBM regulation may still face limited access, pharmacy closures, or de facto steering.
Implementation takes time: for example, some “delinking” laws (where PBMs’ compensation is decoupled from drug price) are scheduled to go into effect years after passage — meaning benefits may take a while to fully materialize. (MultiState)