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The latest PBM regulations: Summer 2024

Get your guide to the evolving health care regulatory landscape and see what’s coming as lawmakers debate 600+ new bills impacting PBMs.

June 10, 2024 | 7-minute read


The pharmacy benefit management (PBM) legislation to watch

Optum Rx closely monitors and acts to influence legislation and rulemaking with the potential to adversely impact pharmacy benefits.

Here is a quick summary of the latest pharmacy benefit legislative and regulatory issues:

  • Federal PBM reform measures not included in federal funding bill
  • PBM reforms are expected be a priority for end-of-year federal legislation
  • CMS releases changes for Medicare Advantage and Part D programs for 2025 plan year
  • Medicare drug price negotiations underway
  • CMS issues Wegovy coverage guidance
  • 600 bills impactful to PBM clients introduced in state legislatures 
  • What Optum Rx is doing and how your voice can be heard

Federal Update

Federal PBM reform legislation

After months of deadline extensions, Congress passed legislation on March 8 and March 22 to fund the federal government through Sept. 30. Despite bipartisan interest from leaders in both the House and the Senate, PBM reforms weren’t included in the bill.

However, House and Senate committees continue to consider changes to how prescription drug benefits are managed.

Senate proposals would require PBMs in Medicare to charge flat services fees that are not based on drug list prices or utilization of drugs. This is also known as “delinking.” The Senate proposals would also tie patient cost-sharing to net prices for some patients with chronic conditions, require additional reporting by PBMs, and ban traditional/spread pricing in Medicaid and for Commercial benefits. 

House proposals would ban health plan clients from using spread pricing in Medicaid arrangements. The bills also codify rules developed during the Trump Administration requiring hospitals and insurers to publicly post their prices. The latest developments occurred in May when the House Ways and Means Committee and the House Energy and Commerce Subcommittee on Health each approved separate telehealth bills. Those bills included PBM delinking and transparency provisions as a “pay for” to offset the costs related to other provisions in the bills.

Prescription drug benefit reforms are expected be a priority for end-of-year legislation. There is also a possibility that a package including provisions impactful to PBM clients could come together and move through Congress sooner. Our External Affairs team and the PBM trade association, Pharmaceutical Care Management Association (PCMA), continue to vigorously advocate against mandatory changes as to how prescription drug benefits are managed. 

2025 MA and Part D final policy rule

On April 4, The Centers for Medicare & Medicaid Services (CMS) released the Final Medicare Advantage (MA) and Part D Policy Rule for 2025. The new rule included several changes to both programs for the 2025 coverage year, including:

  • Finalizes changes to the Medicare Therapy Management (MTM) program originally proposed in Dec. 2022, including adding HIV/AIDS to the list of core chronic diseases plan sponsors must include in their targeting criteria. CMS also finalized the MTM cost-threshold at the average cost of 8 generic drugs which is expected to significantly increase the MTM population. 
  • Permits Part D sponsors to (1) immediately substitute an interchangeable biological product for its reference product, a new unbranded biological product for its corresponding brand name biological product, and a new authorized generic for its brand name equivalent and (2) substitute upon 30 days’ notice any biosimilar biological product for its reference product.
  • Updates the composition and responsibilities for the MA Utilization Management (UM) committee to require at least one member of the committee to have expertise in health equity and that the committee conduct an annual health equity analysis of the use of prior authorization at the plan level.

Medicare drug price negotiation

Medicare drug price negotiations mandated under the Inflation Reduction Act have begun. In April, each manufacturer of the 10 drugs selected for negotiation rejected CMS’ initial offer for establishing maximum fair price for their drug and submitted a counteroffer to CMS. Later in April, CMS rejected the drugmakers’ counteroffers.

This means the process will continue into the summer as the negotiation period for the first 20 drugs ends on Aug. 1. CMS is expected to release final price offers by Sept. 1. The prices for negotiated drugs will go into effect Jan. 1, 2026. 

Part D Wegovy coverage guidance issued

Earlier this month, the FDA approved Wegovy to reduce heart attack and stroke risk in addition to obesity. Part D plans are prohibited by law from covering weight loss drugs.

According to the new guidance from CMS, Medicare prescription drug plans can cover Wegovy, but only when prescribed to reduce the risk of heart attacks or strokes in patients with heart disease. Part D coverage is already available for Novo Nordisk’s other weight loss drug, Ozempic, if it is prescribed to treat other conditions, such as diabetes. 

State Regulatory Update

As of May 31, 33 of the 46 states holding legislative sessions this year have concluded their 2024 sessions. Over 600 bills with provisions impactful to PBM clients were introduced this year.  Many of these bills were defeated through the advocacy efforts of our External Affairs team and PCMA, as well as other stakeholders. 

State bills not enacted

Below is a sample of bills that will not be enacted into law this year:

Alabama HB 238 banned spread pricing, required PBMs to pay actual acquisition costs plus a dispensing fee based on the Alabama Medicaid dispensing fee of $10.64, prohibited pharmacy fees for credentialing and claims adjudication, and required approval from the Department of Insurance Commissioner to initiate a fraud, waste, and abuse investigation.


  • SB 1008 required an insurer that provides coverage for outpatient prescription drugs to include coverage for certain obesity treatments, with limited ability to apply utilization management on these treatments.
  • AB 2180 required amounts paid by or on behalf of an enrollee to be included when calculating an individual’s overall contribution to an out-of-pocket maximum or any cost-sharing requirement under a health benefit plan.


  • HB 924 prohibited health plan white-bagging policies that require provider-administered prescription drugs be sourced from a pharmacy selected by the health plan. Instead, the drugs would have been required to be purchased directly from the health care provider administering the drug.
  • SB 307 required health plans to implement and maintain a gold-carding program that would waive prior authorization requirements for prescribers who met certain thresholds related to prior preauthorization approvals.
  • SB 455 banned the establishment of step therapy protocols for serious mental health treatment by health benefit plans.

Iowa HF 2401 prohibited spread pricing, restricted mandating or incenting individuals to use specific pharmacies, and required PBMs to reimburse pharmacies at actual acquisition cost if it is higher than the MAC list reimbursement amount.

Maryland legislative proposals applied existing provisions of law governing PBMs to ERISA plans, restricted the mandating or incenting the use of specialty pharmacies, applied drug manufacturer coupons to an individual’s copay amount, and mandated point-of-sale rebates.

Mississippi HB 1265 banned spread pricing and required additional mandatory reporting from PBMs and drug manufacturers on rebates and other measures.


  • HB 1627 and SB 843 prohibited the use of spread pricing, imposed any willing provider requirements, restricted the use of mail order pharmacy, and removed the applicability exclusion for Medicare Part D and self-insured ERISA plans.
  • HB 1628 and SB 844 required amounts paid by or on behalf of an enrollee to be included when calculating an individual’s overall contribution to an out-of-pocket maximum or any cost-sharing requirement under a health benefit plan.
  • HB 1976 and SB 983 required health plans to implement and maintain a gold carding program that would waive prior authorization requirements for prescribers who met certain thresholds related to prior preauthorization approvals.

Wisconsin SB 737 and AB 773 mandated pharmacy reimbursement at NADAC plus a dispensing fee of $10.51, imposed any willing pharmacy requirements, limited mail order pharmacies, and prohibited pharmacy accreditation requirements.

Utah HB 425 included provisions on spread pricing, pharmacy fees, point of sale rebates and out-of-network pharmacies.

New state laws passed

As a result of legislation passed by legislatures during 2024 state sessions, several states have finalized new laws that impact PBM clients.  Below is an overview of recent legislation enacted in Washington, Idaho and Kentucky:

  • In Washington, Governor Inslee signed Senate Bill 5213 into law on March 25. The law will go into effect Jan. 1, 2026, and will:
    • Include a provision that prohibits spread pricing
    • Ban requirements that patients use PBM-affiliated pharmacies
    • Prohibit copay or quantity limit differentials among network pharmacies, including mail order vs. retail pharmacies
    • Include a requirement that a home delivery pharmacy receive an affirmative authorization from the patient before dispensing a prescription
  • In Idaho, House Bill 596 was enacted April 1. The law will be effective Jan. 1, 2025, and will:
    • Prohibit spread pricing arrangements
    • Require manufacturer rebates to be passed through to clients to offset defined cost sharing and reduce premiums
    • Require that in-network pharmacies receive dispensing fees sufficient to cover their costs
    • Prohibit mandatory home delivery of prescription drugs
    • Prohibit reducing payment for pharmacy services under a reconciliation process to an effective rate of reimbursement
    • Require PBMs to allow pharmacy appeals if reimbursement amount is below pharmacy’s acquisition cost
  • In Kentucky, Senate Bill 188 was enacted on April 5. The law goes into effect Jan. 1, 2025, and will:
    • Require minimum pharmacy reimbursement at NADAC plus a dispensing fee of at least $10.64
    • Prohibit mandatory home delivery of prescription drugs
    • Mandate that non-PBM-affiliated pharmacies are paid no less than PBM-affiliated pharmacies
    • Impose any willing pharmacy requirements and pharmacy steering restrictions
    • Prohibit reducing payment for pharmacy services under a reconciliation process to an effective rate of reimbursement

A complete review and analysis of these laws to determine their full impact, including applicability to fully insured and self-insured (ERISA and non-ERISA) plans, is currently underway and any changes impacting clients will be communicated by your Optum Rx account management team.

Oklahoma appeals decision to Supreme Court

On May 10, Oklahoma’s Attorney General and Insurance Department asked the U.S. Supreme Court to take up its petition seeking a review of a Tenth Circuit decision in PCMA v. Mulready. That decision overturned portions of Oklahoma’s Patient’s Right to Pharmacy Choice Act of 2019. The key issues involve whether the Employee Retirement Income Security Act (ERISA) and Medicare Part D preempt the state law regulating PBMs.

The Patient’s Right to Pharmacy Choice Act includes provisions that limit a health plan’s pharmacy network structure. More specifically, the law prevents plans from using preferred pharmacy networks and prohibits offering discounts to individuals to use mail order and specialty pharmacies. Left unchallenged, these provisions threaten the ability of employers and Medicare Advantage organizations to design uniform nationwide health plans.

The Tenth Circuit’s decision in favor of PCMA overturned a lower court decision that permitted states to indirectly dictate the design of plans governed by ERISA and Medicare Part D. Oklahoma’s petition argues that the Tenth Circuit’s decision conflicts with the Supreme Court’s precedent and decisions of other circuits regarding the scope of ERISA and Medicare Part D preemption. PCMA expects to file a brief in opposition. The earliest that a decision by the Supreme Court on whether to hear the case could come is early fall 2024.

Help us advocate for you in an evolving regulatory landscape

Both as Optum Rx and through our External Affairs team, we continue to advocate to congressional leaders and their staff to protect the pharmacy benefit tools that matter most to clients. In 2023, Optum Rx executives met with over 150 state and federal policy makers to help shape this challenging legislative and regulatory climate.

Our overall advocacy objectives include:

  • Improving affordability and access for patients
  • Preserving client choice and value
  • Lowering the total cost of care for clients
  • Driving innovation and better health outcomes

In addition to our efforts, we also advocate through our trade association, PCMA, and use both social media and paid advertising through the Coalition for Affordable Prescription Drugs.

We highly encourage clients to get involved with efforts to protect against legislation that will increase your costs. We know clients’ voices have influence with legislators, and we want to help you be heard. If you’d like to be involved in our advocacy, please contact your Optum Rx account management team.

If you’d like to learn more about or become involved in our advocacy efforts, please contact your Optum Rx account management team

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