The Kansas Legislature has taken a decisive step toward reining in pharmacy benefit managers (PBMs) with the passage of Senate Bill 360 (SB 360). For independent pharmacies that have long operated under opaque and often unfavorable PBM practices, this legislation represents a meaningful shift in the regulatory landscape—one that warrants careful attention and proactive preparation.
Legislative History
SB 360 was introduced during the 2025–2026 legislative session by the Senate Committee on Financial Institutions and Insurance at the request of Senator Shallenburger. The bill received strong support from Kansas Insurance Commissioner, Vicki Schmidt, who testified in January 2026 that the state lacked adequate tools to regulate PBMs or to assist Kansans with PBM-related complaints. Proponent testimony was extensive, drawing from independent and community pharmacists across the state, the National Community Pharmacists Association, and the Kansas Hospital Association, among others. Opposition came from Blue Cross and Blue Shield of Kansas, the Kansas Chamber of Commerce, and the Pharmaceutical Care Management Association, with some arguing the issue should be addressed at the federal level. Despite this opposition, SB 360 passed the Senate on a bipartisan vote of 32–8 in February 2026 and subsequently advanced through the House with similarly strong support.
Key Provisions
The Act introduces several provisions that directly target longstanding PBM practices. First, it prohibits spread pricing by requiring PBMs to charge a health benefit plan the same price for a prescription drug that the PBM pays the dispensing pharmacy, eliminating the ability of PBMs to profit from undisclosed pricing differentials.
Second, the bill establishes minimum reimbursement standards, mandating that PBMs reimburse pharmacies at no less than the most recently published National Average Drug Acquisition Cost (NADAC) plus a professional dispensing fee of at least $10.50.
Third, SB 360 requires PBMs to pass through 100% of manufacturer rebates to patients.
Fourth, the legislation imposes a licensure requirement on PBMs, subjecting them to financial and market regulation examinations comparable to those applied to insurance companies.
Fifth, the bill strengthens pharmacy audit protections, requiring written preliminary reports within 60 days of an on-site audit and granting pharmacies at least 30 days to respond.
Finally, PBMs found in violation of the Act face monetary penalties of up to $1,000 per violation—or $5,000 per knowing violation—with previous aggregate caps removed. Operating as a PBM without a license carries fines of up to $100,000.
How This Alters the Status Quo
For independent pharmacies, the practical implications of SB 360 are substantial. Under the current framework, PBMs have operated with minimal state oversight, setting reimbursement rates that frequently fall below a pharmacy’s cost of acquisition and retaining spread pricing margins with little transparency. Many independent pharmacies have been forced to dispense prescriptions at a loss, contributing to closures and reduced patient access, particularly in rural communities. By establishing a reimbursement floor tied to NADAC, prohibiting spread pricing, and mandating full rebate pass-through, SB 360 directly addresses the economic pressures that have eroded the viability of independent pharmacy operations across Kansas.
Preparing for Compliance: Steps to Take Now
While SB 360 may not yet be fully implemented, independent pharmacies should not wait for a final effective date to begin preparing a plan of action. Engaging experienced counsel now can help pharmacies take several immediate steps.
At a minimum, independent pharmacies should prioritize the following:
- Review existing PBM contracts for reimbursement terms, audit clauses, and spread pricing provisions that may conflict with SB 360’s requirements.
- Document current reimbursement rates and compare them against published NADAC benchmarks to establish a pre-enactment baseline.
- Update internal audit response procedures to align with the new 60-day preliminary report and 30-day pharmacy response timelines.
- Monitor rulemaking activity from the Kansas Department of Insurance, as implementing regulations will further define compliance obligations.
- Engage experienced pharmacy or life sciences counsel to assess contract renegotiation opportunities and ensure readiness before the Act’s effective date.
SB 360 marks a turning point for pharmacy regulation in Kansas. With proper preparation and the guidance of knowledgeable counsel, independent pharmacies can position themselves to fully benefit from the protections this legislation provides.
How Frier Levitt Can Help
As experienced counsel in all areas impacting the operation of independent pharmacies, the attorneys at Frier Levitt are well-suited to addressing the individualized needs of independent pharmacies, hospital networks, and PSAOs. If you are interested in assessing how your organization can best prepare for the evolving PBM regulatory landscape in Kansas and across the country, contact our attorneys today.
