Last-Minute Move by Large PBM Could Force More Pharmacy Closures, Drive Patients to Mail-Order-Only

Questionable Mid-Contract Renegotiations Come Weeks After Effective Date of New Law Poised to Rein in Anti-Competitive, Anti-Consumer Practices

Express Scripts, Inc., the nation’s largest pharmacy benefit manager (PBM), is forcing many Texas pharmacies into mid-contract modifications—a move that could drive more pharmacy closures and limit more patients to mail-order transactions for their medicines. The move comes weeks after a new law took effect that is designed to stop anti-consumer and anti-competitive tactics that have already driven some pharmacies in Texas to close.

Express Scripts, which manages prescription drug benefits for insurers, employers and government payers, is forcing unilateral contract amendments on many Texas pharmacies. In some cases, Express Scripts is denying pharmacies enrollment in the Express Scripts network altogether. For pharmacies who remain in network, Express Scripts offers reimbursement for pharmacy services that compensates them less than cost of the medications they purchase and dispense.

Express Scripts Contract Modifications Provide Pharmacies with Impossible Choices

Express Scripts’ contract modifications are far reaching and could impact patients statewide, as well as current and retired state employees, veteran beneficiaries, public school teachers, and public university system employees. According to the Texas Pharmacy Association, Express Scripts has been offering some pharmacies “all or nothing” contracts for its prescription drug management services – which is an apparent violation of provisions in Senate Bill 1236. The Legislature unanimously passed the bill this year and Governor Greg Abbott signed it into law in May. The key consumer-protection provisions of the bill took effect September 1, 2025.

“Senate Bill 1236 is aimed at helping address the anti-competitive, anti-consumer practices of middlemen in the pharmaceutical supply chain known as pharmacy benefit managers,” said Texas Pharmacy Association CEO RoxAnn Dominguez. “That’s why we are concerned with what some might see as an end-run around this legislation with an 11th-hour move to change contracts with local pharmacies.”

Dominguez said this may reduce the number of independent pharmacies in PBM networks so that patients are forced to use mail order pharmacies that the PBMs own or control.

“To expect a pharmacy to earn medication reimbursement rates that are less than what they pay for the prescriptions is a brazen attempt to drive a community pharmacy – essentially a competitor to the PBM’s own pharmacies – out of business,” Dominguez said. “It’s unfair, it’s wrong, and it violates the spirit and in some cases the letter of Senate Bill 1236. This move could drive more pharmacies to close and could force some patients into PBM-controlled mail-order-only transactions for their medicines.”

PBMs have outsized influence over patients’ access to and out-of-pocket costs for prescription medicines. The country’s top three PBMs control the cost of the overwhelming majority of America’s filled prescriptions. In Texas, PBMs set reimbursement rates for virtually all pharmacies that accept insurance reimbursement. PBMs use this market power to direct patients to pharmacies they own or control, and they create obstacles to competition for independent and chain pharmacies alike. Express Scripts is the largest of the “big three” PBMs, handling 30% of all prescription drug claims in 2024.

PBMs’ outsized role in the marketplace and the unsustainable terms they impose on pharmacies create an impossible choice for these small businesses: accept a contract that very likely creates a net loss for the pharmacies or lose critical access to a large portion of the local patient population. Pharmacies cannot survive without market access and market access is controlled and abused by a handful of powerful PBMs. Senate Bill  1236 helps to address this problem, and Express Scripts’ recent actions serve as a clear reminder of why such laws are critical to protecting independent pharmacies and simple fairness.

SB 1236 Works to Prevent PBM Practices that Drive Independent Pharmacies Out of Business

PBMs have been widely criticized nationally for abusing their power and for their vertical integration, which is resulting in the gradual elimination of independent and competitive chain pharmacies and the reduction of consumer choice and access.  Scores of neighborhood pharmacies have been forced out of business, with at least one Texas pharmacy closing every week for the past two years. Urban and rural communities alike are being affected by pharmacy closures. From January 2023 through January 2025, Harris and Dallas counties topped the list with the most net pharmacy closures, at 79 and 30, respectively. This was followed by Fort Bend County with 18 net pharmacy closures, Hidalgo County with 15 and Tarrant County with nine.

These closures threaten pharmacy access for growing numbers of Texans, especially in low-income urban and rural areas. Some 4.3 million Texans now live in a pharmacy desert. And nearly 2 million Texans rely on a single pharmacy whose closure would create a pharmacy desert, further undermining access to care.

“Pharmacies are often the first and sometimes the only health care touchpoint for many Texans,” Dominguez said. “But PBMs’ abusive tactics threaten our ability to deliver quality care to our communities. We can’t let these health care lifelines disappear.”

What Is at Stake Under SB 1236

Senate Bill 1236 was written to protect patients and local pharmacies from the abusive business practices of powerful PBMs. The law requires fair and transparent contracts and prohibits PBMs from imposing a unilateral “adverse material change” to an existing contract, such as cutting reimbursement rates or changing key administrative terms without a pharmacy’s express agreement. Now, PBMs must notify pharmacies of their rights to reject such changes.

In other words, Texas lawmakers have made it clear: PBMs cannot change the rules midgame to the detriment of these small businesses and the communities they serve. Senate Bill 1236 is designed to restore balance and accountability in a system that has long tilted toward corporate middlemen.

Now, as Express Scripts pushes through last-minute contract modifications, it raises serious questions about whether these actions violate the spirit or even the letter of this new law. Texans deserve to know whether the state’s protections are being enforced and whether independent pharmacies can survive to continue serving their communities.