This is one of two arguments for and against state regulation of drug sales. Read an opposing viewpoint here.
Prescription medicine costs and access are major concerns for American families and state lawmakers are taking meaningful steps to address them. Across the country, they’re passing practical, bipartisan laws to rein in one of the most powerful and least transparent players in the drug supply chain: pharmacy benefit managers, or PBMs.
PBMs are the corporate middlemen who decide which medicines are covered, how much patients pay at the pharmacy counter and how much pharmacies are reimbursed. Patients are paying more than they should and facing barriers to care because these middlemen are using medicines as a profit center.
In fact, half of every dollar spent on prescription drugs goes to PBMs and others who do not make medicines. Reforming PBMs is one of the most effective and efficient ways to lower medicine costs and help ensure patient access to needed medicines. States are proving it can be done.
State legislators are uniquely positioned to act because they live in the communities they serve and hear directly from those affected by high drug costs. They speak with constituents who are frustrated by rising health coverage costs and reduced benefits, and local pharmacists struggling with below-cost reimbursements from PBMs.
These real-world stories have made states successful testing grounds for needed PBM changes. In 2025 alone, several states passed laws that directly address harmful PBM practices.
Here are some of the states that took substantial measures this year, although they don’t capture the full scope of activity nationwide:
Colorado is eliminating hidden, misaligned incentives that experts say drive up prices by prohibiting a PBM from earning income based on the price of a medicine, which helps remove incentives to prioritize financial gain over patient needs.
North Carolina is making sure patients see savings by requiring PBMs to pass along discounts and price concessions at the pharmacy counter. That means lower out-of-pocket costs for patients, not more profits for middlemen.
Indiana and Maryland are protecting patients by closing loopholes in health insurer coverage that allow policies like adjustment programs, maximizers, and alternative funding programsto interfere. These policies can make it harder for patients to get important treatments for chronic illnesses such as asthma, diabetes, arthritis and HIV.
Illinois is targeting PBM tactics that inflate costs and limit access by banning spread pricing, where PBMs profit by charging insurers more than they reimburse pharmacies, and prohibiting patient steering to PBM-owned pharmacies. These changes put patients, not profits, at the center.
Other states across the country, such as Arkansas, West Virginia and Alaska, are addressing PBM practices in a variety of ways. They are proving that there is bipartisan support for steps that lower drug costs and improve access by holding PBMs accountable.
We hope Congress can build on the great progress taking place in the states. There is clear bipartisan support for PBM reform, as shown by legislation that has passed U.S. Senate and House committees, but patients are still waiting for action. At the very least, Congress needs to break the linkage between PBM revenues and drug prices, mitigating the incentives to cover only more expensive drugs, and mandate that patients directly receive the benefits from negotiated rebates.
The states have created the blueprint for effective policies to increase access and affordability for prescription medicines. Now it’s time to take this momentum to the federal level.
Scott LaGanga is executive vice president of the Pharmaceutical Research and Manufacturers of America (PhRMA).
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
