Senate Bill 1122 expands Texas PBM regulations following Supreme Court rulings

The Senate Committee on Health and Human Services convened on March 5, 2025, to discuss Senate Bill 1122, a significant piece of legislation aimed at regulating pharmacy benefit managers (PBMs) in Texas. The bill seeks to align state law with a 2020 U.S. Supreme Court ruling and a 2024 opinion from Texas Attorney General Ken Paxton, which clarified that states can impose regulations on employer-sponsored health plans, including those governed by the Employee Retirement Income Security Act (ERISA).

Senator Schwartner, the bill's author, emphasized that SB 1122 extends existing patient and pharmacy protections to all PBM activities in Texas, regardless of the health plan type. He asserted that the bill does not create new mandates but ensures that ERISA-based PBMs comply with state laws, thereby protecting independent pharmacies and ensuring patient access to medications.

During the meeting, committee members raised concerns about potential cost increases associated with the bill. However, proponents, including pharmacists and legal experts, argued that the legislation would not raise costs. They pointed to existing regulations that have already proven effective in lowering prescription drug prices by increasing transparency and fairness in PBM practices.

Testimonies from industry representatives highlighted the monopolistic behavior of large PBMs, which control a significant portion of the market and often engage in practices that disadvantage independent pharmacies. They called for the bill as a necessary step to level the playing field and ensure fair competition.

The committee concluded the session by leaving SB 1122 pending for further discussion, indicating ongoing deliberations about the implications of the bill for Texas healthcare and pharmacy practices. The outcome of this legislation could significantly impact how PBMs operate in the state and the accessibility of medications for patients.