Committee advances bill targeting PBM vertical integration to protect independent pharmacies

Representative Marty (speaker 4) presented House Bill 3,538, describing it as a measure to address "monopolistic practices of pharmacy benefit managers and their vertical integration system." Marty cited federal reports and a congressional study, and said the bill would require PBMs to divest retail pharmacy ownership rather than forcing closures: "The bill forces the industry out of vertical integration. If they choose to divest those pharmacies, they can divest those pharmacies. They don't have to be closed."

Committee members asked detailed questions about consequences for local access, mail‑order restrictions and whether independent pharmacies could mail prescriptions to patients. The sponsor said major PBMs generally prohibit retail pharmacies from mailing prescriptions in some contracts and that the bill is intended to restore competition and contractual flexibility. Marty also cited nonrenewals of pharmacy licenses since 2019 as evidence of declining access and argued the bill would improve competition for government contracts and mail‑order services.

Representative Hampton asked about license‑revocation language and the potential for store closures; the sponsor responded the bill would not mandate closures and that divestiture or third‑party acquisition options exist. Members discussed potential regulatory and contracting changes needed to preserve local pharmacy access.

The committee reported the bill out 13‑0. Marty said the bill has broad stakeholder engagement and aims to protect independent pharmacies and patient access.

What’s next: HB 3,538 will move from committee for further consideration; if enacted it would require implementation steps and review of government contracting practices that currently favor vertically integrated PBMs.