Why it matters

By mandating full rebate pass-through and requiring “any willing provider” inclusion in pharmacy networks, SB 41 challenges some of the industry’s most entrenched practices. Given the sweeping nature of the provisions in this bill, it has the potential to have broad implications for the PBM landscape and could pave the way for wider adoption of similar reforms in other states.

Mandating minimum reimbursements for pharmacies (Illinois)

Illinois HB 3705 is a multi-faceted bill that looks to tackle a breadth of elements, including transparency, fair compensation for pharmacies, and what state lawmakers term anti-competitive practices by PBMs. It introduces a mandated minimum reimbursement of national average drug acquisition cost (NADAC) plus $15.55 for critical access pharmacies, with a stated policy goal of ensuring they remain viable in underserved areas. It also prohibits spread pricing, where the PBM reimburses the pharmacy less than 90% of what they collect from the plan sponsor and imposes rebate transparency requirements that mandate that at least 90% of payments from pharmaceutical manufacturers go back to plan sponsors.

Why it matters

The pharmacy reimbursement provisions of the bill will have cost implications for plan sponsors if it goes into effect on January 1, 2026. PBMs are likely to pass along the added cost to plan sponsors. Proponents of the bill argue that, if implemented, the law could help ensure pharmacies in smaller regions stay operational. However, some evidence suggests — something PBMs are likely to point to — that independent pharmacies are increasing year over year.

Prohibiting steering (Alabama)

Passed recently and signed into law by the state governor, Alabama’s SB 252 focuses on steering practices and pharmacy reimbursement. Based on a broad definition of steering, PBMs would be restricted from influencing an individual’s choice of pharmacy or from requiring the use of a mail-order pharmacy or PBM affiliate. The bill also prohibits spread pricing and certain PBM rebate practices. Interestingly, however, the bill appears to grant an exception to these rules if the health benefits plan requires it by contract. In addition, PBMs would be required to reimburse independent pharmacies at the state Medicaid rate (average acquisition cost plus a $10.64 dispensing fee).

Instant Insights /

Drug price reform: 5 state-level bills and their potential national impacts

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