The National Association of Chain Drug Stores (NACDS) today commends Texas’ unwavering commitment to pharmacy benefit manager (PBM) reform following the signing of Senate Bill 1236 into law by Governor Greg Abbott. This milestone legislation, passed unanimously by the Texas Legislature and championed by Senator Bryan Hughes and Representative Cody Harris, marks a significant moment in the fight for fairness, transparency, and access to pharmacy care.
SB 1236 stands as a testament to Texas’ resolve, building upon the state’s previous PBM reform legislation and delivering crucial new protections for pharmacies. The law prevents PBMs from clawing back more than a minimal dispensing fee during audits for minor clerical errors, ensures fair contracts by preventing PBMs from forcing pharmacies into disadvantageous networks, and requires a 90-day notice for any contract changes. Further, it enhances transparency by requiring patient ID cards to clearly show plans regulated by the Texas Department of Insurance and mandates that PBM contracts state their compliance with the Texas Insurance Code.
“This is a win for Texas patients and pharmacies, and a reflection of what principled leadership can achieve,” said Steven C. Anderson, president and CEO of NACDS. “We thank Governor Abbott for signing this critical bill into law, building on Texas’ proud tradition of holding PBM middlemen accountable. SB 1236 takes direct aim at the manipulative practices that drive up prescription costs and threaten access to neighborhood pharmacies.”
The urgency for reform is apparent. Last year, nearly 7% of Texas pharmacies closed, affecting both chains and independents. SB 1236 offers real solutions: fair audits, consistent contract terms, and protections that enable pharmacies to continue serving their communities.
This legislative success in Texas coincides with growing federal attention on PBMs. In January 2025, the Federal Trade Commission released a report showing how dominant PBMs increased the prices of specialty generics by substantial margins, resulting in over $7.3 billion in excess revenue from 2017 to 2022. These findings further underscore the need for comprehensive reforms at all levels of government.
“The fight for PBM reform needs a broad approach — state and federal, executive and legislative, regulatory and judicial — because PBM middlemen will stop at nothing to protect their interests,” Anderson said. “Governor Abbott, Senator Hughes, and Representative Harris deserve immense credit for their commitment to fair pharmacy reimbursement and patient access. Their efforts will ensure Texans have access to the medications they need from trusted pharmacies, while shielding those pharmacies from harmful PBM practices that threaten their existence.”
