Under a new law, employer-sponsored health plans will not be able to require employees to use—or give them financial incentives to use—pharmacies owned or controlled by their pharmacy benefit managers (PBM), but will stand to receive 100 percent of the rebates received by a PBM or an affiliated rebate aggregator. Illinois’s “Prescription Drug Affordability Act” will further impact employer plans by prohibiting PBMs from using “spread pricing,” referring to arrangements in which the contracted price charged to a plan for a drug is different from the price the PBM directly or indirectly paid to a pharmacist or pharmacy for that drug.

Quick Hits

• Illinois’s recently enacted Prescription Drug Affordability Act regulates PBMs by imposing strict transparency requirements.
• The law prohibits PBMs from utilizing spread pricing, requires that PBMs pass on rebates to health plan sponsors, and prohibits steering patients toward specific pharmacies that a PBM owns or controls.
• The law also adds a new $15.00-per-member fee for PBMs, which will be used to support independent pharmacies in underserved areas.

Illinois House Bill (HB) 1697 (Public Act 104-0027), which was signed into law by Governor JB Pritzker on July 1, 2025, principally regulates PBMs, which operate under state licenses. The statute also imposes a new $15.00-per-member fee on PBMs to fund grants for independent pharmacies in underserved areas, and it provides important audit rights for plan sponsors. In addition, HB...

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