Ohio just took a major step toward fixing one of healthcare’s most opaque corners: pharmacy benefits managers. On October 8, 2025, the Ohio House of Representatives passed Ohio Superintendent of Insurance, creating accountability where none existed before.
What House Bill 229 Actually Does
The legislation focuses on two main areas: rebate transparency and fair pharmacy reimbursement. Let’s break down what changes.
Rebate transparency requirements:
PBMs negotiate rebates with drug manufacturers—essentially kickbacks for placing drugs on formularies (the lists of covered medications). Under House Bill 229, PBMs must report aggregate rebate data to the state insurance superintendent, including how much they received from manufacturers and how much they passed along to health plans or employers.
This matters because PBMs often keep a portion of rebates rather than passing savings to insurers or consumers. Without disclosure requirements, there’s no way to know if your employer’s health plan is getting the negotiated discounts it thinks it’s getting.
Payment clarity mandate:
The bill requires itemized records of all payments flowing to and from PBMs. This creates an audit trail showing where money goes at each step—from manufacturer to PBM to pharmacy to patient.
Right now, that trail is murky. Pharmacies often don’t know how reimbursement rates are calculated. Employers sponsoring health plans can’t verify what they’re actually paying for. House Bill 229 forces documentation.
| Current System | Under House Bill 229 |
|---|---|
| PBMs disclose minimal rebate data | Aggregate rebate reporting required |
| Payment records often unavailable | Itemized payment documentation mandated |
| Affiliate pharmacies can receive higher reimbursement | Same reimbursement rates for identical services |
| Limited state oversight | Ohio Superintendent of Insurance gains examination authority |
Fair reimbursement rules:
Here’s where independent pharmacies see the biggest change. The bill prohibits PBMs from reimbursing non-affiliated pharmacies at lower rates than their own pharmacies for identical services.
This practice is called “spread pricing,” and it’s been a major complaint from independent pharmacies for years. If a PBM-owned pharmacy gets reimbursed $150 for dispensing a medication but an independent pharmacy only gets $120 for the same medication and service, that independent pharmacy operates at a disadvantage it can’t overcome.
How This Affects Your Prescription Costs
The most common question: Will this lower what I pay at the pharmacy counter?
Not directly, at least not immediately. House Bill 229 doesn’t cap drug prices or limit copays. What it does is create conditions for more competitive pharmacy pricing and better-informed health plan decisions.
Here’s the potential pathway to lower costs:
- More competition among pharmacies. When independent pharmacies can compete on equal footing with PBM-owned chains, market competition should drive down prices or improve service quality.
- Better-informed employers. Companies that sponsor health plans will have data to negotiate better PBM contracts, knowing exactly what rebates and fees they’re paying.
- State oversight pressure. The Ohio Superintendent of Insurance can now examine PBM practices and publicly report problems, creating reputational incentives for better behavior.
The catch: These are indirect effects that take time to materialize. Don’t expect lower copays in 2026 just because the law passes. Think of this as infrastructure for future cost control rather than immediate relief.
Still, transparency has value even without immediate price drops. You’ll have clearer information about why your medication costs what it does, and your employer or health plan will have better tools to push back against excessive PBM fees.
What Happens Next in the Legislative Process
The bill now moves to the Ohio State Senate. There’s no specified deadline for consideration, but the unanimous House vote suggests strong momentum.
What could derail it? PBM lobbying groups, mainly. The Pharmaceutical Care Management Association (the national PBM trade group) typically argues that transparency requirements impose administrative costs that get passed to consumers. They may also claim that disclosure of rebate negotiations undermines their bargaining power with drug manufacturers.
However, that argument has been losing ground nationally. Multiple states have passed similar PBM transparency laws in recent years, and federal legislation has been proposed (though not yet passed) to address these issues nationwide.
If the Ohio Senate passes House Bill 229 with minimal changes, Governor Mike DeWine would have the option to sign it into law. Given the bipartisan support, a veto seems unlikely unless PBM industry pressure proves unusually effective.
Assuming the bill becomes law, implementation would likely begin in 2026, with the first rebate reports due to the state in early 2027 covering 2026 transactions.
Will Other States Follow Ohio’s Lead?
Ohio isn’t the first state to regulate PBMs, but it’s moving faster than most. According to the National Association of Insurance Commissioners, over 20 states have enacted some form of PBM regulation in the past five years.
What makes Ohio’s approach notable:
- Comprehensive scope: The bill addresses rebates, reimbursement, and state oversight simultaneously rather than tackling one issue at a time.
- Strong bipartisan backing: A 96-0 vote provides political cover for legislators in other states considering similar measures.
- Practical enforcement mechanism: Giving the state insurance superintendent examination authority creates real accountability rather than just reporting requirements that go unreviewed.
Arkansas, Louisiana, and West Virginia have enacted aggressive PBM regulations in recent years. Kentucky and Tennessee are considering similar bills. The trend points toward more state-level action unless federal legislation preempts it.
For consumers in other states: Watch what happens in Ohio. If the law passes and produces measurable improvements in transparency or competition, expect your state legislators to propose copycat legislation within 12-18 months.
Frequently Asked Questions
Will House Bill 229 lower my prescription drug costs immediately?
Not directly or immediately. The bill doesn’t cap drug prices or limit copays. What it does is require transparency in PBM rebate practices and fair reimbursement for independent pharmacies, which could lead to lower costs over time through increased competition and better-informed health plan negotiations. Expect any cost impacts to materialize over 1-3 years rather than months.
When will House Bill 229 become law in Ohio?
The bill passed the Ohio House on October 8, 2025 with a 96-0 vote. It now awaits consideration by the Ohio State Senate. There’s no set deadline, but the unanimous House support suggests strong momentum. If the Senate passes it and the governor signs it, implementation would likely begin in 2026, with first compliance reports due in 2027.
How does this law help independent pharmacies compete?
House Bill 229 prohibits PBMs from reimbursing non-affiliated pharmacies at lower rates than their own affiliated pharmacies for identical services. This eliminates the practice of “spread pricing,” where PBM-owned chains (like CVS Caremark reimbursing CVS pharmacies) receive higher payments than independent pharmacies for dispensing the same medications. Fair reimbursement creates a level playing field for competition.
What rebate information will PBMs have to disclose?
PBMs must report aggregate data on rebates received from drug manufacturers and rebates distributed to health plans or employers. This doesn’t reveal individual drug prices or proprietary negotiations, but it shows whether PBMs are passing along negotiated savings or keeping a significant portion for themselves. The Ohio Superintendent of Insurance will have authority to examine these records.
Does this bill apply to all PBMs operating in Ohio?
Yes. House Bill 229 applies to all pharmacy benefits managers operating in Ohio, regardless of whether they’re based in Ohio or headquartered elsewhere. This includes large national PBMs like CVS Caremark, Express Scripts, and OptumRx, as well as smaller regional PBMs. Any PBM processing prescription drug claims for Ohio residents must comply with the law’s transparency and fair reimbursement requirements.
Ohio’s House Bill 229 represents a meaningful step toward addressing longstanding problems in prescription drug pricing. The unanimous vote shows lawmakers from both parties recognize that PBM practices affect their constituents’ wallets directly.
For Ohio residents, the immediate effect is limited—you’ll still pay whatever copay your insurance requires. But over the next few years, this law could reshape how PBMs operate, creating more competition among pharmacies and giving employers better tools to negotiate drug benefit costs.
The bigger question is whether Ohio’s approach becomes a model for other states. If this law produces measurable improvements in transparency and competition, expect rapid adoption nationwide. If implementation proves difficult or PBMs find workarounds, the momentum for PBM regulation may stall.
Either way, October 8, 2025 marked a turning point in how Ohio regulates pharmacy benefits. Whether that turning point leads to lasting change depends on what happens in the Senate and how effectively the state enforces the law once enacted.