Ohio has officially joined the growing wave of states enacting sweeping pharmacy benefit manager (PBM) reform. On April 1, 2026, Governor Mike DeWine signed House Bill 229 (HB 229) into law, introducing a new regulatory framework that will significantly impact how PBMs operate, and how independent pharmacies are reimbursed.
As we previously discussed in our January 2026 analysis of HB 229, the bill underwent significant changes during the legislative process. The final version differs in several important respects from the House-passed version. Below, we examine key provisions in the final version of this legislation that benefit independent pharmacies and highlight the most notable changes emerging from the Ohio Senate’s amendments.
Why HB 229’s Passage Matters
Under prior law, PBMs operating in Ohio were regulated under the Third-Party Administrator (TPA) Law (R.C. Chapter 3959), a framework widely regarded as inadequate to address the unique market power PBMs wield over drug pricing and pharmacy reimbursement. HB 229 replaces that approach with a standalone PBM licensure and regulatory chapter, R.C. Chapter 3957, which treats PBMs as a distinct category of regulated entities subject to tailored oversight mechanisms. The bill passed the Ohio Legislature unanimously (94-0), and Ohio now joins a growing number of states (including California and Florida) that have enacted dedicated PBM regulatory frameworks. This state-level momentum coincides with mounting federal scrutiny, including the FTC’s July 2024 report finding that the three largest PBMs process nearly 80% of U.S. prescriptions and that independent pharmacies “generally lack the leverage to negotiate terms and rates” with PBMs.
Provisions Beneficial to Independent Pharmacies
Despite changes made during the Senate process, HB 229 as signed into law retains several provisions that meaningfully strengthen the regulatory landscape for independent pharmacies in Ohio.
Standalone PBM Licensure. HB 229 establishes a dedicated licensure requirement for PBMs under R.C. Chapter 3957. This creates a gatekeeper function: PBMs that fail to meet regulatory standards can be denied entry to the Ohio market or removed from it, a level of control that did not meaningfully exist under the prior TPA Law. The Superintendent of Insurance is directed to develop PBM-specific rules and examination protocols, considering “best practices relative to the use and regulation of PBMs.”
Fiduciary Duty and Agency Requirements. HB 229 requires PBMs to act as the insurer’s agent and imposes a fiduciary duty on the insurer regarding prescription drug benefits. The practical implications and limitations of this provision are discussed below.
Enhanced Transparency and Examination Authority. The final law grants the Superintendent broad authority to examine PBM books and records (including rebate data, amounts payors paid PBMs, and amounts PBMs paid pharmacies) and to contract with third parties to conduct those examinations at the PBM’s expense. This is significant because plan sponsors are often unaware of the gap between what they pay PBMs and what PBMs actually reimburse pharmacies. These provisions create the informational predicate for enforcement actions targeting unfair reimbursement practices.
Expanded Enforcement and Penalties. The final law significantly broadens the Superintendent’s enforcement authority to include civil penalties, license suspension or permanent revocation, corrective action orders, and the ability to request Attorney General prosecution, with courts empowered to impose penalties of up to $15,000, injunctive relief, and restitution.
Broader Reporting Obligations. The final law requires a licensed PBM or any owner to notify the Superintendent of any administrative action or criminal prosecution (other than a misdemeanor traffic offense) within 30 days, a significant expansion from the House version, which was limited to felony convictions. This gives the Superintendent earlier visibility into PBM compliance issues across jurisdictions.
Other Provisions. The final law also retains the prohibition on PBMs using or permitting “untrue, deceptive, or misleading” practices, which could be invoked when PBMs misrepresent their reimbursement structures. The Senate additionally codified a requirement that PBMs maintain protected health information in compliance with HIPAA and applicable state privacy laws.
Key Changes from the House Version to the Final Law
The Ohio Legislative Service Commission (LSC) published a detailed synopsis of the Senate committee amendments. The most significant changes are as follows.
Removal of the Anti-Differential Reimbursement Provision. The House-passed version explicitly prohibited PBMs from reimbursing a pharmacy less than they would reimburse a PBM affiliate for the same service, a provision the LSC identified as central to the bill’s intent to curb anti-competitive practices. The Senate removed this provision entirely. Without it, PBMs may continue reimbursing their vertically integrated affiliated pharmacies at higher rates than they pay independent pharmacies for identical services. Other states have addressed this gap directly (Florida’s HB 697 requires equal reimbursement for non-affiliated pharmacies, and California’s SB 41 bars discriminatory reimbursement). but Ohio’s final law does not include comparable language.
Limitations of the Fiduciary Duty as a Substitute. The fiduciary duty provision, while valuable, is not an adequate substitute for the removed reimbursement parity requirement. The duty runs to the insurer, not to the pharmacy, which means independent pharmacies are not parties to the fiduciary relationship and generally lack standing to bring a direct claim for breach. An insurer’s interests and a pharmacy’s interests are not necessarily aligned: a PBM that negotiates aggressively low reimbursement rates to independent pharmacies may be acting entirely consistently with a fiduciary duty to the insurer if those lower rates translate into lower plan expenditures. For self-insured employer plans governed by ERISA, the state-law fiduciary duty faces potential preemption challenges, as the Pharmaceutical Care Management Association (PCMA) has already demonstrated by suing to challenge California’s analogous provision. The result is that independent pharmacies cannot compel insurers to exercise their rights under this framework, and the structural incentives of the vertically integrated PBM market may discourage insurers from doing so voluntarily.
Other Technical and Administrative Changes. The Senate also made several narrower amendments, including replacing the fixed 30-day application review window with a “reasonable time” standard, simplifying the license reinstatement fee to a flat $4,500, and changing the records retention standard from “detailed” to “relevant.” Two changes carry more direct practical significance. The “knowingly” element was moved from the substantive prohibition on operating without a license to the criminal penalty provision, meaning the prohibition itself now applies regardless of intent. The Senate also added a new exemption for third-party administrators that provide pharmacy benefit management services solely to affiliated insurers or self-funded employee benefit plans on a non-standalone basis, narrowing the universe of entities subject to the new licensure framework.
Looking Ahead
HB 229 gives Ohio’s independent pharmacies a meaningfully stronger regulatory foundation than they had before: standalone PBM licensure, fiduciary obligations, transparency tools, and expanded enforcement authority. Taken together, these provisions represent the most comprehensive overhaul of PBM oversight the state has undertaken.
The removal of the anti-differential reimbursement provision, however, leaves a significant gap—one that pharmacy advocates have signaled they intend to address in short order. Companion legislation such as HB 192, which would require pharmacy reimbursement at acquisition cost plus an adequate dispensing fee, may provide a direct avenue for closing it. At the federal level, parallel efforts, including the PBM FAIR Act and the new PBM disclosure requirements enacted as part of the Consolidated Appropriations Act of 2026, could supply additional pressure and, potentially, a complementary layer of protection.
The regulatory architecture is now in place. Translating it into concrete reimbursement protections for independent pharmacies remains the unfinished work—and, for many stakeholders, the measure by which HB 229’s broader reforms will ultimately be judged.
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. As PBM regulation continues to evolve, in Ohio and across the country, now is the time to evaluate how these changes may impact your organization. Contact our attorneys today to assess your position and develop a strategy moving forward.
