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Supporters tell committee SB 1122 would extend PBM rules to ERISA plans; committee leaves measure pending
Summary
Senate Bill 1122 would extend state PBM oversight to activity by PBMs for ERISA employer plans; pharmacy industry witnesses urged the committee to pass the bill and said it would improve transparency and protect independent pharmacies.
Senate Bill 1122 was presented to the committee as a measure that would extend existing Texas pharmacy‑benefit manager (PBM) rules to ERISA‑based, employer‑sponsored plans. The sponsor framed the bill as codifying a 2024 Texas Attorney General opinion and as consistent with a 2020 U.S. Supreme Court ruling described repeatedly during the layout.
Sponsor remarks (Senator Schwartner) said SB 1122 does not impose new mandates on plans but clarifies that PBMs must follow the requirements of Subchapters L and M of Chapter 1369 of the Texas Insurance Code for all PBM activity in the state, including for out‑of‑state employer plans delivered to Texas residents. He warned members to ignore rhetorical framings such as "mandate" or "preemption" misleadingly applied by opponents.
Invited and resource witnesses included Dr. Ashley Gerling, representing the Texas Pharmacy Association, Miguel Rodriguez of American Pharmacies, and other pharmacy and independent pharmacy representatives. Witnesses described market concentration among a small set of vertically integrated PBMs controlling over 80% of the market, alleged self‑dealing (steering to PBM‑owned pharmacies), and large reimbursement disparities between PBM‑owned mail order pharmacies and independent retail pharmacies. Witnesses argued SB 1122 promotes transparency and fair competition and does not increase plan costs.
The committee left SB 1122 pending and said it will hear invited testimony later in the hearing. The sponsor and witnesses asked for amendments and codification consistent with the AG opinion to enable enforcement and clarity.
