October 2025 is turning out to be the month where the "middlemen" finally hit a wall. If you’ve been following the saga of Pharmacy Benefit Managers (PBMs), you know the drill. It’s usually a lot of talk in D.C. and very little action at the pharmacy counter. But honestly, the PBM reform news October 2025 cycle is different. It’s messy, it’s litigious, and for the first time in years, the big players like Caremark, Express Scripts, and OptumRx are actually on the defensive in a way that feels permanent.
The biggest bombshell? California just threw a massive wrench into the machine.
On October 11, 2025, Governor Gavin Newsom signed SB 41 into law. This isn't just another "we need more reports" kind of bill. It’s a direct strike. It bans spread pricing—that’s the practice where PBMs charge your insurance more for a drug than they actually pay the pharmacist, pocketing the difference. Starting January 1, 2026, California is forcing these companies to switch to a flat management fee. No more skimming off the top of your insulin or MS meds.
The Feds are finally playing hardball
While the states are moving fast, Washington is kind of a chaotic scene right now. You’ve probably heard about the PBM Reform Act of 2025 (H.R. 4317). It’s got that rare bipartisan energy that you almost never see anymore. Representatives Buddy Carter and Debbie Dingell are leading the charge to basically "de-link" PBM profits from drug prices.
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Basically, they want to stop the incentive for PBMs to pick the most expensive drugs just because they get a bigger rebate.
But here’s the kicker: as of late October, the federal government is dealing with a temporary shutdown, which has paused some of the FTC’s administrative actions. Before the lights went out, the FTC was locked in a high-stakes battle over insulin pricing. They’re accusing the "Big Three" of manipulating the market to keep list prices high. The PBMs tried to get the case dismissed in late August, but the judge told them no. Now, everyone is waiting for the evidentiary hearings scheduled for April 2026.
It’s a game of legal chicken.
Why your pharmacy bill might look different soon
If you’re on Medicare, the PBM reform news October 2025 highlights a massive shift in how you'll pay for medicine starting in January. We are officially in the "ready" phase for the first ten negotiated drug prices.
Medicare negotiated some heavy hitters:
- Eliquis and Xarelto (blood thinners)
- Jardiance and Januvia (diabetes)
- Enbrel and Stelara (autoimmune)
The government says these prices are at least 38% lower than the 2023 list prices. This is a huge deal because PBMs have traditionally relied on the "rebate trap" for these high-cost drugs. With the government setting a "Maximum Fair Price," the old way of doing business is evaporating.
The "Pharmacy Desert" crisis is pushing state laws
Independent pharmacies are dying. It’s a fact. In rural areas, when the local drug store closes, people have to drive 40 miles for a prescription. This is what’s driving the localized PBM reform news October 2025.
Take Arkansas. They tried to ban PBMs from owning their own pharmacies (Act 624). The idea was to stop "steering," where a PBM tells you that you must use their mail-order pharmacy instead of the guy down the street. Right now, a federal court has temporarily blocked that law, saying it might violate the Commerce Clause. It’s a setback, but states like Iowa and Indiana are watching the appeal closely.
Iowa’s SF 383 is another beast. It mandates a $10.68 dispensing fee for pharmacists. Why? Because right now, many PBMs reimburse pharmacies less than what the drug actually costs to buy. You can't run a business like that.
What most people get wrong about these reforms
Most people think "reform" means prices drop tomorrow. Kinda, but not really.
The industry is fighting back with everything they have. They argue that if you take away their ability to negotiate rebates, premiums will go up. It’s a classic "pick your poison" argument. However, the Department of Labor is pushing back. On September 4, 2025, they previewed new regulations to force PBMs to disclose exactly how much they’re getting paid in "indirect compensation."
Transparency is the goal. But transparency doesn't always equal "cheap."
Real-world impact: What happens next?
If you’re managing a chronic condition or running a small business health plan, you can’t just sit and wait for D.C. to finish its fight. The reality is that the PBM business model is shifting from a "percentage of cost" model to a "fee for service" model.
What you should do right now:
- Audit your plan: If you’re an employer, ask your broker if your PBM contract includes "pass-through" pricing. If they say "it's complicated," they're probably keeping your rebates.
- Check state-specific rules: If you live in California, Massachusetts, or Colorado, new protections against "co-pay accumulators" and "steering" take effect soon. Make sure your insurer isn't still using the old rules.
- Watch the January 1st shift: For those on Medicare Part D, the $2,000 out-of-pocket cap is coming. This, combined with the negotiated prices, is the most tangible benefit of all this legislative noise.
The "One Big Beautiful Bill Act" might have been stripped of some PBM provisions earlier this year, but the momentum hasn't stopped. It’s just moved from the halls of Congress to the courtrooms and state capitals. The era of the "hidden middleman" is ending, one lawsuit at a time.
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Actionable Insight: Reach out to your HR department or insurance provider and ask for a "Transparency in Coverage" report. Under the latest federal rules, they are increasingly required to show you the data that PBMs used to hide. Use that data to advocate for lower-cost generic alternatives that the PBM might be "forgetting" to mention on your formulary.