States Target Pharmacy Benefit Managers to Lower Prescription Drug Prices

In 2026, legislators in at least a dozen states enacted laws to curb the power of pharmacy benefit managers (PBMs) that manage prescription coverage for health insurers. Over 120 bills were introduced in 26 states, and a quarter cleared at least one chamber. Tennessee’s law, effective July 1 2028, will bar PBMs from operating retail pharmacies.

Seattle Times

PBMs negotiate drug prices, process pharmacy claims for insurers, and sometimes own pharmacies. The three largest PBMs, including CVS Health Corp., handle most U.S. prescriptions. CVS, operating about 9,000 pharmacies, including 136 in Tennessee, is led by Prem Shaw, president of its pharmacy and PBM division. Tennessee Sen. Bobby Harshbarger, Sen. Shane Reeves, and Rep. Robert Stevens have championed the reforms. Independent pharmacists Lisa Gales of Main Street Pharmacy in Kansas and Seth White, a CVS manager in Knoxville, have voiced concerns.

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

A KFF poll found 60 % of U.S. adults worry about affording prescriptions and 40 % reported skipping doses in the past year. PBMs and allies have spent $24 million on ads since early 2025; CVS spent $4 million opposing Tennessee’s law. AdImpact tracked the spending. New state laws set dispensing fees at $10.50 per prescription in Kansas and $11.81 in Louisiana, while independent pharmacies report losing money on 86 % of prescriptions.

Seattle Times

CVS argues its model is essential; Prem Shaw says without PBMs “you’d need to invent one” and likens criticism to “blaming umbrellas for the rain.” Rep. Robert Stevens warned that regulation should be a federal responsibility, noting Congress recently barred PBMs from keeping Medicare-related rebates.

Seattle Times

Independent pharmacists say mandatory dispensing fees act as a “pill tax” that could raise costs and threaten small-town pharmacies. Kansas pharmacist Lisa Gales called the $10.50 fee a “great win” but said it remains far below her actual costs, having lost money on 86 % of prescriptions. In Knoxville, CVS manager Seth White faces possible job loss if Tennessee’s ban stands, and his customers could lose a local pharmacy. In Cedar Vale, Kansas, 79-year-old Faith Sanders warned that without the town’s pharmacy residents would need to travel 35 miles for medication.

Seattle Times

Proponents claim fee caps lower plan costs; opponents call the fees a “pill tax.” Analysts dispute whether state-level measures can curb PBM practices without federal legislation.

Seattle Times

• “If PBMs already didn’t exist, you’d need to invent one,” — Prem Shaw, President, CVS Health PBM division

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

• “Blaming PBMs for high drug prices is like blaming umbrellas for the rain.” — Prem Shaw

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

• “We get to the point where it’s hard for us to get out of town.” — Faith Sanders, Cedar Vale, Kansas

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

• “It’s still way under what it’s costing us.” — Lisa Gales, Main Street Pharmacy, Kansas

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