At AMCP 2025, speakers from the AMCP government affairs team unpacked the latest developments in state-level policies affecting managed care pharmacy, including pharmacy benefit manager (PBM) reform, artificial intelligence (AI) in health care, 340B protections, and broader pharmacy benefit trends.

The session began with an overview of the 2025 state legislative sessions. By April 2, 5 states had adjourned their general sessions, with state lawmakers focused heavily on prescription drug benefits. As of March 17, AMCP was tracking 1097 bills introduced across state legislatures this term.

“Reforming RBM business practices and limiting utilization management tools are continuing to be leading topics in state legislatures,” said Tom Casey, MPP, associate director of government affairs at AMCP. “We’ve also seen a number of governors that are prioritizing transparency, lowering patient cost sharing, and protecting independent pharmacies as part of their budget requests.” 

Medicaid programs are also facing increased pharmacy spending and must comply with federal mandates related to mental health parity and prior authorizations. Casey noted a sharp rise in legislation around coverage and formulary requirements, with 271 bills introduced in 2025 alone—already more than double the total seen in 2023 and 2024 combined.

Lawmakers are increasingly interested in ensuring benefit designs accommodate new technologies, generic and biosimilar competition, and expanded access for patients with chronic conditions. Utilization management, particularly for mental and behavioral health services, is a growing focus. Guardrails on formulary changes during the plan year and improved coverage for treatments related to pain and weight management are also priorities.

In the mental and behavioral health space, AMCP is tracking 85 bills across 27 states. Many of these seek to strengthen mental health parity laws, ensuring coverage criteria align with accepted standards of care and utilization management tools like prior authorization are applied fairly. Other legislative priorities include expanding Medicaid coverage for maternal mental health services, mandating coverage for autism spectrum disorder treatment, and limiting barriers to care for severe mental health conditions.

Speakers also highlighted the US Food and Drug Administration’s (FDA) January 30 approval of a novel, non-opioid treatment for moderate to severe acute pain. In response, 31 states have introduced legislation encouraging Medicaid and state-regulated plans to favor non-opioid options in formularies, preventing more restrictive controls on non-opioid products compared to opioids. Some states propose automatic formulary adjustments upon FDA approval.

Non-opioid pain medications may reduce prescription drug misuse and opioid use disorder, although their impact is limited by the current FDA indications, which do not cover chronic pain. Additionally, prescription drug misuse is not the leading cause of overdose deaths, raising broader questions about public health trade-offs.

Weight management treatments also remain a legislative focus. The FDA has approved 3 GLP-1 receptor agonists for chronic weight management, though coverage for these drugs outside of type 2 diabetes remains inconsistent. Lawmakers in 15 states have introduced 24 bills to mandate coverage for FDA-approved chronic weight management therapies across Medicaid, state employee plans, and private insurers, often requiring utilization management standards that mirror those for other covered services.

PBM reform remains a major area of activity, with AMCP tracking 217 bills across 39 states. Key topics include PBM income transparency, pharmacy audits, reimbursement practices, and copay adjustment programs. Additionally, 60 bills in 23 states aim to regulate the use of AI by health care entities, with about half focused on prior authorization processes.

Bills targeting AI in prior authorizations often mandate a human review before an adverse determination can be finalized and emphasize transparency, fairness, and anti-discrimination standards. A notable example is Texas’s Responsible Artificial Intelligence Governance Act (HB 1709), which would create comprehensive oversight for high-risk AI systems. Requirements include risk management policies, consumer disclosures, and reporting of algorithmic discrimination, along with enforcement by the state Attorney General.

Turning to the 340B Drug Pricing Program, AMCP is tracking 54 bills in 27 states that regulate the conduct of covered entities, drug manufacturers, or PBMs. Between 2010 and 2023, 340B purchases grew by 1220%, compared to a 103% rise in overall drug expenditures. Covered entities collected approximately $57.8 billion in discounts in 2023 alone, yet transparency around how these savings are used remains limited.

Most 340B-related bills aim to prohibit discrimination against covered entities and child sites, preventing practices such as refusing to cover 340B drugs, applying unequal reimbursement, or requiring unnecessary claims reporting. Manufacturers are similarly restricted from limiting 340B acquisitions or imposing conditions not required under federal law. For example, Idaho’s HB 136 would require covered entities to report detailed data annually on 340B transactions and usage, joining Minnesota, Maine, and Washington in enforcing greater transparency.

Several states have also implemented changes to PBM regulations. California now requires PBM licensing and reporting, Louisiana has imposed fiduciary duties, Maine has mandated greater price transparency, and New York has adopted fiduciary care standards. Meanwhile, Arkansas and California’s Medicaid programs continue to grapple with drug cost management challenges.

PBM regulatory trends span rebate practices, spread pricing, retroactive payment adjustments, pharmacy reimbursement methodologies, licensure, transparency reporting, network adequacy, enrollee cost-sharing limits, and utilization management reforms. Many states have also reinforced protections for 340B covered entities.

As state legislatures continue to shape the future of managed care pharmacy, issues like PBM reform, AI oversight in health care, non-opioid pain treatment access, weight management therapies, and 340B program transparency will remain central to ongoing policy debates. The breadth and complexity of legislation introduced in 2025 highlights the urgent need for policymakers to balance innovation, access, affordability, and accountability across the health care system.

Reference 
Casey T, Jucelin V. Education Session: [L4] State legislative and regulatory update. Presented at: AMCP 2025; March 31-April 3; Houston, TX.