Independent pharmacies have long complained about pharmacy benefit manager (PBM) practices that suppress reimbursement rates, retain manufacturer rebates, and restrict network access. Recent enforcement actions in West Virginia and Michigan signal a meaningful shift in the regulatory landscape, one that independent pharmacy owners and their advocates should watch closely. This trend of aggressive enforcement against PBMs continues to grow nationwide, with policymakers and stakeholders across the political spectrum expressing increased scrutiny of PBM practices. For independent pharmacies, this moment represents more than a shift in policy. It is a critical opportunity to reassess strategy, assert their rights, and prepare for a rapidly evolving enforcement environment.
West Virginia: Aggressive Enforcement and Measurable Impact
In West Virginia, the Office of the Insurance Commissioner has emerged as one of the most aggressive state regulators of PBM conduct in the country. The state’s landmark law, HB 2263 (enacted in 2021), requires PBMs to pass through 100% of manufacturer rebates to plan sponsors or employers and prohibits PBMs from reimbursing affiliated pharmacies at higher rates than independents. The law also mandates NADAC-based reimbursement with a $10.49 dispensing fee, providing independent pharmacies with a predictable and transparent reimbursement floor.
However, PBMs in West Virginia have allegedly been side-stepping HB 2263’s mandates; and in March 2026, the Insurance Commissioner assessed a $1.5 million penalty against Express Scripts for compliance violations, including failures related to pharmacy reimbursement and rebate pass-through requirements. Beyond monetary fines, the Commissioner’s enforcement toolkit includes license suspension and revocation, audit authority, cease and desist orders, restitution of improperly retained funds, and referral to the state attorney general. Consent orders have also been used as a compliance mechanism, with Express Scripts entering into a consent order with the Commissioner in September 2024.
The practical results are already visible. According to the West Virginia Department of Insurance, the rebate pass-through mandate reduced the average group health-plan rate increase for 2026 from 19.5% to 12.6%, demonstrating that PBM reform can lower costs without undermining pharmacy access.
Michigan: Antitrust and Transparency Enforcement
Michigan has taken a different but equally consequential approach. In April 2025, Attorney General Dana Nessel filed an antitrust lawsuit against Express Scripts and Prime Therapeutics, alleging that a 2019 agreement between the two PBMs artificially suppressed reimbursement rates to independent pharmacies. The complaint paints a stark picture: some pharmacies now pay more to dispense medications than they receive from insurers in reimbursement, contributing to pharmacy deserts in half of Detroit’s neighborhoods and across northern Michigan.
The lawsuit seeks termination of the agreement under the Sherman Antitrust Act, the Michigan Antitrust Reform Act, and public nuisance laws. Michigan has also built out a licensing and transparency framework through the Pharmacy Benefit Manager Licensure and Regulation Act (PA 11 of 2022), which took effect on January 1, 2024, and requires PBMs to obtain a license, file modifications of information within 30 days, and submit annual transparency reports beginning April 1, 2025. The law also prohibits gag clauses and bans retroactive payment reductions to pharmacies.
National Implications for Independent Pharmacies
For independent pharmacies, the significance of these developments cannot be overstated. West Virginia’s enforcement regime demonstrates that rebate pass-through mandates and reimbursement floors are not merely aspirational, they are enforceable, and regulators are willing to impose substantial penalties for noncompliance. Michigan’s antitrust litigation, meanwhile, directly targets the contractual arrangements that have driven reimbursement rates below the cost of dispensing, threatening the economic viability of independent pharmacies in underserved communities.
Together, these actions reflect a broader national trend of heightened PBM scrutiny, including the FTC’s ongoing lawsuit against the three largest PBMs and new federal PBM reforms enacted in the Consolidated Appropriations Act of 2026.
Action Steps for Independent Pharmacies
Independent pharmacies can take several concrete steps in response to these recent enforcement actions:
- Audit contracts and reimbursement records. Pharmacies should review their PBM contracts and reimbursement data to identify potential violations of state rebate pass-through, anti-spread-pricing, and reimbursement floor requirements. This documentation can support administrative complaints or serve as evidence in enforcement proceedings.
- Engage regulators proactively. When pharmacies identify below-cost reimbursements, retroactive payment clawbacks, or other prohibited PBM practices, they can file complaints with their state insurance commissioner or attorney general. Beyond complaints, pharmacies can proactively share market data, reimbursement trends, and firsthand accounts of PBM practices that harm patient access.
- Advocate for legislative reform and build coalitions. Pharmacies and their trade associations should actively participate in state rulemaking proceedings and legislative sessions to advocate for West Virginia and Michigan-style reforms in jurisdictions that have not yet adopted them, including NADAC-based reimbursement floors, mandatory rebate pass-throughs, and PBM licensure requirements. Coalition-building is essential to this effort. Independent pharmacies should consider partnering with state pharmacy associations, patient advocacy groups, rural health organizations, and employer coalitions. These stakeholders share an interest in transparent, competitive pharmacy markets. The West Virginia and Michigan experiences show that broad-based coalitions are more effective at securing durable reforms than any single stakeholder group acting alone.
- Evaluate antitrust claims. In states where antitrust theories are viable, independent pharmacies should evaluate whether coordinated PBM conduct (such as the Express Scripts–Prime Therapeutics arrangement challenged in Michigan) has suppressed reimbursement rates in their markets and, if so, consider whether private antitrust claims or participation in state enforcement actions may be warranted.
The window for meaningful PBM reform is open, and independent pharmacies that engage strategically will be best positioned to shape the regulatory frameworks that govern their economic survival.
How Frier Levitt Can Help
Frier Levitt’s attorney counsel independent pharmacies nationwide on PBM-related regulatory, contractual, and enforcement issues. Our team assists clients in auditing PBM contracts and reimbursement practices, identifying potential violations, and developing strategies to challenge improper conduct. We also work with pharmacies to engage with regulators, pursue administrative and legal remedies, and advocate for meaningful legislative reforms.
If your pharmacy is navigating PBM-related challenges or seeking to develop a proactive strategy to address reimbursement pressures and compliance risks, contact Frier Levitt to learn how we can help protect your business and position it for long-term success.
