The drug pricing regulatory and legislative landscape continues to evolve rapidly at both federal and state levels. Below, we highlight some of the more prominent activity that occurred between February 7, 2025, and May 21, 2025.
Federal regulatory activity
Commercial
- Preventive Services Task Force Challenge: On April 22, 2025, the U.S. Supreme Court heard oral arguments in Kennedy v. Braidwood, a case challenging the Affordable Care Act's preventive services mandate, with a decision anticipated later in the summer.
General drug updates
- COVID-19 Vaccines: The FDA announced on May 20, 2025, the requirement for full clinical trials for updated COVID-19 vaccines for healthy individuals aged 6 months to 64 years, maintaining current access approvals for older adults and high-risk individuals.
- Executive Orders (EOs) on Drug Prices:
- Most-Favored Nation EO: Signed on May 12, 2025, President Trump aims to align U.S. drug prices with other developed countries, with HHS directed to enforce measures if voluntary compliance is not met.
- Domestic Production EO: Issued on May 5, 2025, focusing on reducing barriers for domestic pharmaceutical manufacturing.
- Lowering Drug Prices EO: Signed on April 15, 2025, targeting Part D premium stabilization, drug payment models for Medicare, and stringent Medicaid rebate accountability.
- Pharmaceutical Tariffs: A national security investigation into the reliance on imported pharmaceuticals was announced on April 16, 2025. This study is seen as a potential precursor to tariffs on prescription drugs.
Congressional activity
Senate initiatives
- Prescription Drug Advertisements: The No Handouts for Drug Advertisements Act to prevent tax deductions for consumer drug advertisements was introduced on May 16, 2025.
- PBM Competition Issues: A Senate hearing held on May 13, 2025, focused on competition issues within the pharmacy benefit manager (PBM) sector.
- International Reference Pricing: The Fair Prescription Drug Prices for Americans Act aims to align U.S. pricing with international standards.
- 340B Program Reforms: A report by Senator Cassidy on April 24, 2025, suggests improved transparency and guidelines for 340B program participants.
House of Representatives
- Budget Reconciliation: Passed on May 22, 2025, the budget includes drug pricing reforms affecting PBMs in Medicaid.
- Drug Importation: The Affordable and Safe Prescription Drug Importation Act was introduced on May 5, 2025, to permit drug importation from Canada.
State legislative activity
As of May 21, 2025, state legislatures adjourned with about 886 PBM-related bills actively addressing issues such as PBM compensation, fiduciary duties, and spread pricing.
Enhanced state legislation
- Arkansas: HB 1150, prohibiting PBM ownership of pharmacy businesses, effective April 16, 2025.
- Alabama: SB 252 mandates rebate pass-throughs and regulates pharmacy fees immediately, with certain provisions effective October 1, 2025.
- Indiana: SB 140 and SB 3 enacted allowing employer PBM choice and imposing fiduciary responsibilities effective July 1, 2025.
- Virginia: SB 875 establishes a single PBM for Medicaid benefits by July 1, 2026.
Pending legislation
- Iowa and Colorado: Bills addressing reimbursement and transparency await Governor action by their respective deadlines.
- Texas: SB 1236 sets PBM contracts within the Insurance Code pending Governor approval.
Emerging state issues
- Regulation of group purchasing organizations (GPOs)/rebate aggregators — 7 states
- Restrictions on vertical integration, including bans on PBM/pharmacy ownership and required merger reviews — 11 states
Conclusion
We hope you found this summary of federal and state legislative and regulatory activity helpful. While topics that legislators and regulators are focusing on are constantly evolving, this summary captures many of the issues that are currently in review. The information in this report is current as of May 28, 2025.
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