Texas Pharmacists Applaud Hughes Legislation to Protect Patients, Pharmacists from PBM Practices

State Senator Bryan Hughes (R-Mineola) today filed Senate Bill 1236, legislation that would increase oversight of pharmacy benefit managers and help maintain patient access to prescription drugs. The legislation is one of the Texas Pharmacy Association’s top priorities for the 89th Legislature.

Pharmacy benefit managers, or PBMs, serve as middlemen between health plans, patients, and pharmacies, determining not only which prescription drugs are covered but also at which pharmacies patients can fill their prescriptions. The three largest PBMs control approximately 80% of the nation’s drug claims. PBM practices are rife with self-dealing and threaten Texas pharmacies’ continued viability.

“PBMs are powerful organizations with the power to crush our small, independent pharmacies. When that happens, we see less competition and prices increase,” Hughes said. “An uneven playing field shortchanges pharmacists and creates barriers, denying Texans the medications they need.”

Hughes’ legislation would protect Texas pharmacies and the patients they serve by instituting audit protections, mandating contract fairness and transparency, ensuring compliance with existing PBM laws, and prohibiting unfair fees.

“This a watershed moment—one that can ensure a fairer, more competitive marketplace,” said TPA President Jobby John, Pharm.D. “While PBMs were created with the intention of reducing costs, we now see a system that has spiraled out of control, contributing to rising health care costs and creating an unsustainable cycle of negative reimbursements. This is a fight for fairness, transparency, and the survival of pharmacies across Texas.”

PBMs face mounting scrutiny nationwide for their lack of transparency and their role in driving up the cost of prescription drugs. In July 2024, the Federal Trade Commission (FTC) issued a scathing report finding that PBMs wield enormous power over patients’ ability to access and afford their prescription drugs, allowing PBMs to significantly influence what drugs are available and at what price. The FTC released a second interim staff report on January 14 focusing on PBMs’ influence over specialty generic drugs. Recent PBM reform legislation received broad, bipartisan support in Congress.

PBMs often use audits as a financial tool to aggressively claw back payments from pharmacies over minor clerical errors that do not impact patient care. They also use market power to force pharmacies to enter into “all or nothing” bundled contracts.

In 2021, the Texas Legislature took a bold stand against PBM overreach by passing two landmark laws—House Bill 1919 and House Bill 1763 to protect patients and pharmacies. Yet, PBMs continue to undermine these laws, creating deliberate confusion about their applicability to specific patients and contracts. Despite legislative efforts to ban exploitative fees, such as post-adjudication recoupments and transaction fees, PBMs have found new ways to squeeze pharmacies, demanding application and re-credentialing fees, sometimes before even allowing pharmacies to review contract terms. These predatory tactics threaten patient access, pharmacy viability, and the integrity of Texas' health care system.

Senate Bill 1236 would:

• Prohibit PBMs from recouping anything beyond a nominal dispensing fee as a result of an audit if a patient received the correct medication,
• Ensure any changes or modifications to contracts are provided to pharmacies with at least 90 days to review, and prohibit unilateral changes by the PBM without pharmacy consent,
• Require patient ID cards have unique identifier numbers for plans regulated by the Texas Department of Insurance and would require PBM contracts to indicate that the terms are subject to the Texas Insurance Code, increasing oversight clarity, and
• Prohibit certain fees that are unfair to community pharmacies.