Texas Pharmacists Celebrate Unanimous Passage of Legislation to Help Save Neighborhood Pharmacies

AUSTIN—Texas lawmakers have given unanimous approval and final passage to key legislation supported by Texas pharmacists that will help protect patients, pharmacies and employers from the anti-competitive, anti-consumer practices of middlemen in the pharmaceutical supply chain who are driving up prescription drug costs and forcing scores of neighborhood pharmacies out of business. At least one Texas pharmacy has closed every week for the past two years.

Senate Bill 1236 by Sen. Bryan Hughes (R-Mineola) will help protect patients and pharmacists from the abusive practices of pharmacy benefit managers (PBMs) by requiring contract fairness and transparency, ensuring compliance with existing PBM laws, and prohibiting unfair fees. The measure was sponsored in the Texas House of Representatives by Rep. Cole Hefner (R-Mount Pleasant).

PBMs, which manage the lists of prescription drugs covered by public and private health insurers, have been widely criticized in Texas and across the country for using a flawed system to profit unfairly at the expense of consumers, employee health plans and neighborhood pharmacies – all while driving business to pharmacies the PBMs own or control. The result has been increased prescription drug costs for patients and the forced closure of neighborhood pharmacies, which means the loss of a critical health resource, especially in rural and underserved communities.

“As pharmacists, our priority is patient care, but PBMs’ anti-competitive tactics have threatened our ability to deliver quality healthcare to our communities,” said Jobby John, President of the Texas Pharmacy Association (TPA) and a Lakeway pharmacist. “SB 1236 will go a long way toward correcting inequities in the system and ensuring transparency and fairness, which will help protect the neighborhood pharmacies that Texans trust.”

SB 1236 passed the Texas Senate in April with a vote of 31-0 and received unanimous support Tuesday in a vote in the Texas House of Representatives. The measure now heads to Texas Governor Greg Abbott.

“We are incredibly grateful to Sen. Hughes and Rep. Hefner for their hard work and dedication to Texas patients and pharmacists,” said RoxAnn Dominguez, TPA CEO. “We look forward to continuing to work with these lawmakers, other members of the Legislature, and Texas leadership to continue to support pro-patient legislation such as SB 1236.”

Currently, the nation’s largest PBMs control the cost of the overwhelming majority of America’s filled prescriptions, as well as significant chunks of the pharmaceutical supply chain, including the country’s largest retail pharmacy chains.

A series of recent government and private sector reports illustrates how the abuses PBMs heap on the drug distribution system have left Americans scrambling to pay for their prescription medications and forced many pharmacies to shutter their stores.

A January 2025 Federal Trade Commission (FTC) report found that the three largest PBMs “marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent.” These included “critical drugs used to treat serious diseases and conditions, including cancer, HIV, multiple sclerosis, and pulmonary hypertension,” according to the FTC report. “Additionally, the Big 3 PBMs reimbursed their affiliated pharmacies at a higher rate than unaffiliated pharmacies on nearly every specialty generic drug examined,” the report stated.[1]

In a July 2024 report, the FTC noted the three largest PBMs “wield enormous power and influence over patients’ access to drugs and the prices they pay. This can have dire consequences for Americans, with nearly three in ten surveyed Americans reporting rationing or even skipping doses of their prescribed medicines due to high costs.” Noting the impact of PBMs on independent pharmacy closures, the report stated: “Closures of local pharmacies affect not only small business owners and their employees, but also their patients. In some rural and medically underserved areas, local community pharmacies are the main healthcare option for Americans, who depend on them to get a flu shot, an EpiPen, or other lifesaving medicines.”[2]

Between January 3, 2023, and January 31, 2025, Texas experienced a net closure of at least one pharmacy every week, impacting rural and urban counties. This year’s closure list includes a San Angelo pharmacy whose owner blamed the PBMs’ low reimbursement rates for his store’s demise in January after 68 years of serving the community. “We really get pennies on the dollar,” said Bryan Abernathy, the pharmacy owner.

SB 1236 will help address these issues by:

• Protecting pharmacies from abusive PBM audit practices.
• Ensuring compliance with existing PBM laws.
• Prohibiting unilateral changes on key contractual provisions such as reimbursement rates during a PBM contract term.