Texas pharmacists lauded Gov. Greg Abbott on Tuesday for signing Senate Bill 1236 into law. The measure aims to curb anti-competitive practices by pharmacy benefit managers (PBMs) that have reportedly driven numerous neighborhood pharmacies out of business and raised prescription drug costs for patients.
Authored by Sen. Bryan Hughes (R-Mineola) and sponsored in the House by Rep. Cole Hefner (R-Mount Pleasant), SB 1236 targets PBMs, middlemen in the pharmaceutical supply chain who have been criticized for prioritizing profits over patients and pharmacies.
The bill passed unanimously in the Texas Senate and House and introduces contract transparency, prohibits unfair fees, and ensures compliance with existing PBM regulations.
It takes effect September 1, 2025, and applies to contracts entered into or renewed after that date.
“The PBMs set the reimbursements for our local pharmacies, which are struggling to stay open,” Hughes said, per a news release by the Texas Pharmacy Association. “They also determine the prices for their own pharmacies. Senate Bill 1236 continues the Legislature’s efforts to make sure that anti-competitive behavior by someone with a lot of bargaining power, that’s been granted to them by the government, is not weaponized in the market.”
Texas Pharmacy Association CEO RoxAnn Dominguez hailed the legislation as a victory for patients and pharmacists.
“We are incredibly grateful to Governor Abbott for making SB 1236 the law in Texas, and to Sen. Hughes and Rep. Hefner for their hard work and dedication to Texas patients and pharmacists,” Dominguez said in the press release. “We look forward now to working with the Texas Department of Insurance and the Attorney General’s Office to implement SB 1236 for the betterment of patient care.”
PBMs manage prescription drug benefits for insurers, employers, and government payers, but their practices have drawn scrutiny. A January 2025 Federal Trade Commission report found that the top three PBMs—CVS Caremark, Cigna Express Scripts, and UnitedHealth Group’s Optum RX—which control 80% of the drug supply market, marked up specialty generic drugs by hundreds or thousands of percent at their affiliated pharmacies.
These markups included critical medications for cancer, HIV, and multiple sclerosis. The report also noted higher reimbursements to affiliated pharmacies compared to independent ones.
A July 2024 FTC report highlighted that nearly 30% of Americans surveyed reported rationing or skipping medications due to high costs, which the pharmacy association said are driven by PBM practices.
These practices have led to widespread pharmacy closures, with Texas losing at least one pharmacy weekly between January 2023 and January 2025. In San Angelo, pharmacist Bryan Abernathy closed his 68-year-old pharmacy in January, citing PBMs’ low reimbursement rates.
“We really get pennies on the dollar,” Abernathy said.
Sen. Lois Kolkhorst (R-Brenham), chair of the Senate Committee on Health and Human Services, criticized PBM market dominance during a hearing.
“Who in America thinks that’s a good idea?” Kolkhorst said, noting that “the losers are the pharmacists which are sometimes the only people that people in underserved areas get a chance to interact [with]. . . but the other loser is the patient.”
SB 1236 addresses these issues by prohibiting abusive PBM audit practices, banning unilateral changes to reimbursement rates during contract terms, and mandating online access to pharmacy network contracts. It also requires health benefit plans to include unique identifiers on enrollee ID cards and limits payment adjustments after claims are processed, except in cases of fraud or errors.
“PBMs’ anti-competitive tactics have threatened our ability to deliver quality healthcare to our communities,” Jobby John, a Lakeway pharmacist, and the Texas Pharmacy Association president said in the press release. “SB 1236 will go a long way toward correcting inequities in the system and ensuring transparency and fairness, which will help protect the neighborhood pharmacies that patients trust.”