Illinois Lawmakers Support Governor’s PBM Tax

The legislature sent HB 1697 to Gov. Pritzker’s (D) desk, which he is expected to sign into law. The bill contains many harmful provisions, including a $15 annual tax per covered individual on PBMs. Although the bill was amended to exclude applicability to some union plans, it otherwise is broadly applicable across all lines of business and is expected to generate nearly $165 million in revenue, with $25 million to be earmarked for a grant program that will further support critical access pharmacies. The remaining balance will be available to likely fill portions of the state’s perpetual budget deficit.

Effective on Jan. 1, 2026, HB 1697 also prohibits the use of spread pricing, requires payment parity between affiliated and nonaffiliated pharmacies, prohibits the exclusive use of affiliated networks, and mandates the pass-through of all manufacturer and rebate aggregator payments to plan sponsors.

Transparency reporting requirements on PBMs and group purchasing organizations are also in the legislation, including establishing reporting obligations on the PBM that will be used to develop an “annual pharmacist dispensing costs report” that is intended to provide a baseline to set a mandatory dispensing fee in the future.