The momentum behind pharmacy benefits management (PBM) reform has not slowed in 2026. As the year passes its midpoint, federal enforcement, state legislation, and a growing body of court decisions continue to reshape the rules that govern how PBMs operate and how self-insured plans interact with them.
Several developments stand out. The Federal Trade Commission (FTC) appears poised to close out its enforcement action against all three major PBMs, while the Department of Labor (DOL) is working towards a potential autumn implementation of its PBM compensation transparency rule. State courts are weighing constitutional challenges to aggressive new PBM laws in Tennessee and Illinois. A federal appeals court has reinforced preemption covered by the federal Employee Retirement Income Security Act of 1974 (ERISA) in a way that directly affects employer plan design. And state legislatures, after years of intense activity, have notably slowed their pace on the most consequential bills.
For plan sponsors, these shifts carry real implications for compliance planning, contracting strategy, and pharmacy network design. Here is what you need to know:
FTC Enforcement Update: CVS Caremark Settlement Released, Optum Rx on the Horizon
The FTC’s enforcement action against the three largest PBMs is nearing its end. On June 12, the agency withdrew the Optum Rx matter from adjudication, signaling that a settlement is likely close. More recently, on July 14, the FTC announced the terms of its settlement with CVS Caremark. Below is a comparison of key terms from the Express Scripts and CVS Caremark settlements.
| Item | Express Scripts (Feb. 2026) | CVS Caremark (July 2026) |
| Implementation date | Earlier of written certification of full compliance, or Jan. 1, 2027 | Same |
| Standard Offering (core terms) | Member costs capped at list price minus rebate; point-of-sale rebates; no spread pricing; no rebate guarantees | Cost cap is based on the plan sponsor’s contracted rate (not list price) |
| Plan sponsor opt-out / customization | Plan sponsors may request customized terms in writing instead of the Standard Offering, except Cigna’s fully insured plans, which must receive it regardless | Same; no opt-out for Aetna’s fully insured plans |
| Retail pharmacy offering | Actual acquisition cost plus dispensing fee; added pay for non-dispensing services; no exclusion of pharmacies accepting the terms | Same |
| Hub pharmacy offering | Not included | Bars interference with pharmacy hub service providers, subject to defined exceptions |
| GPO relocation | Ascent must move from Switzerland to the U.S. by July 1, 2028 | Zinc must remain U.S.-based |
| Duration of order | 10 years from Implementation Date | Same |
With Express Scripts and CVS Caremark already settled, and Optum Rx on the horizon, the case appears effectively over. For plan sponsors, the message is clear: regulators are pushing PBMs toward transparent, pass-through models.
The DOL PBM Compensation Transparency Rule
The DOL’s proposed “Improving Transparency into Pharmacy Benefit Manager Fee Disclosure” rule on PBM compensation transparency would require PBMs to give employer-sponsored ERISA plans detailed disclosures on spread pricing, manufacturer payments, and formulary placement incentives, paired with robust plan audit rights. The public comment period closed April 15 with more than 560 comments, many citing overlapping requirements with the Consolidated Appropriations Act of 2026 (CAA 2026) and an overly aggressive effective date.
The latest update projects a September 2026 final rule date. That timing signals that the DOL is still working through the issues raised in comments and intends to finalize its approach later this year. While this projected date isn’t set in stone, it is critical to follow this rulemaking closely and review PBM contract language now for audit rights, rebate pass-through, and disclosure terms so you’re ready for any changes.
Tennessee FAIR Rx Act Litigation
Tennessee’s FAIR Rx Act (SB 2040) bars PBMs, along with the insurers or parent companies that control them, from owning or operating pharmacies in the state. CVS filed suit within hours of the bill’s signing, followed by separate but parallel lawsuits from the Pharmaceutical Care Management Association (PCMA) and Express Scripts.
All three suits raise the same core arguments. They contend that SB 2040 violates the Commerce Clause of the U.S. Constitution, will impede prescription drug access, and is preempted by both ERISA and federal Medicare statutes.
Expect these challenges to unfold over several years. A similar Arkansas law was enjoined last year, and litigation from Express Scripts, CVS, and Optum Rx continues in federal court.
Illinois PDAA Litigation
PCMA has taken a more surgical approach to Illinois’ Prescription Drug Affordability Act (PDAA), challenging only these two provisions rather than the law as a whole:
- Reporting requirements: The first provision requires PBMs to submit detailed annual reports to the Illinois Department of Insurance covering granular drug pricing and dispensing data.
- Network design restrictions: The second prohibits PBMs from designing pharmacy networks in ways that benefit their own affiliated pharmacies.
The ERISA preemption arguments are strong: the Supreme Court has struck down similar state reporting requirements, and recent cases in Oklahoma and Tennessee have favored PBMs on network design. This narrower strategy shows the industry is focusing on its strongest arguments.
Sixth Circuit McKee Foods Decision
In early April, the Sixth Circuit handed employers a significant win. In McKee Foods, the court held that key provisions of Tennessee’s 2023 PBM statute relating to pharmacy network design are preempted by ERISA. The decision reinforces Congress’ intent that employer health plans and benefit design be governed by uniform federal standards.
The ruling closely parallels, and strengthens, the Tenth Circuit’s decision in PCMA v. Mulready. Two federal circuits now agree that pharmacy network design laws are preempted by ERISA, rebuilding ERISA preemption as a powerful deterrent to state efforts that intrude into plan design.
The practical effect is greater predictability and certainty for employer-sponsored health plans on questions of pharmacy network design.
State Legislative Update
Overall, state legislative activity tells a different story this year. Of the approximately 1,600 pharmacy benefits-related bills monitored across 46 state general sessions in 2026, most critical bills were defeated or failed to advance. Currently, only 7 states remain in general sessions, with 2 states in special sessions that aren’t expected to touch PBM matters. Two factors likely explain the lower rate of critical bill enactments:
1. Federal reform activity: The federal PBM reforms enacted earlier in 2026 gave state lawmakers reason to pause.
2. Industry strategy: PBMs’ renewed communications efforts appear to have shaped the legislative debate effectively.
The following chart outlines specific state bills to watch across several key issues. All bills listed are currently pending and have not yet been enacted, unless otherwise noted:
| State bill | Pharmacy reimbursement | Network restrictions | Spread pricing | Accumulator programs | Rebates | Vertical integration (PBM pharmacy closure) |
| Kansas | SB 20 (enacted) | SB 20 (enacted) | SB 20 (enacted) | |||
| Louisiana | HB 1236 (enacted) | |||||
| Massachusetts | HD 1358 | HD 1358 | HD 1358 | HD 1358 | ||
| New Jersey | SB 2345 | SB 2345 | SB 3381 | |||
| New York | A 5882 | A 6546 | ||||
| Ohio | HB 905 | |||||
| Pennsylvania | HB 2050 | |||||
| Tennessee | SB 2040 (enacted, subject to litigation) | |||||
| Virginia | HB 830 (enacted) |
The most active states in recent weeks have been Louisiana, Kansas, and Virginia.
Louisiana: The governor recently signed bills addressing pharmacy reimbursement, rebates, spread pricing, and delinking, among other issues. These new requirements carry multiple overlapping effective dates, creating a complex implementation timeline. For now, PBMs will be required to pay local pharmacies a $9 dispensing fee retroactive to January 1, 2026. As of June 12 and forward, a new dispensing of $11.81 (the Medicaid rate) will apply at local pharmacies. Expect PBMs to reprocess claims and make adjustments in order to account for the retroactive effective date. Other changes, such as rebate pass through and elimination of spread pricing, are delayed until January 1, 2027.
Kansas: Effective July 1, SB 20 will prohibit spread pricing, require rebate pass through to plan sponsors, and mandate pharmacy reimbursement in the state at the National Average Drug Acquisition Cost (NADAC) plus a $10.50 dispensing fee. Due to an ERISA exemption written into the bill, most provisions will only apply to self-funded plans that are non-ERISA.
Virginia: The state will begin mandating rebate pass through under HB 830 effective July 1, 2027. The applicability of this bill remains under review.
Actionable Next Steps Plan Sponsors Need to Know
The legal and regulatory landscape for pharmacy benefits is shifting quickly. Federal enforcement is pushing the industry toward transparent, pass-through models, while courts continue to uphold ERISA protections for plan design.
To stay ahead and protect your clients’ plans:
- Track litigation such as the Tennessee and Illinois cases and the McKee Foods and Mulready decisions, especially for multistate clients.
- Assess each client’s exposure to new state laws, keeping in mind that effective dates may vary widely.
- Lean into the transparency trend by helping clients secure contracts with clear disclosures, pass-through pricing, and independent clinical oversight from their pharmacy benefits partners.
Check back on the RxBenefits blog for important Q3 2026 legislative updates.
Learn more:
PBM Legislative Updates Employers Should Watch in 2026, May 27, 2026
Preparing for 2028: The New ERISA Rebate Pass-Through Mandate, April 28, 2026
Decoding PBM Reform Legislation: Essential Q1 2026 Insights for Self-Funded Plan Sponsors, April 15, 2026
