When Governor J.B. Pritzker signed House Bill 1697, the Prescription Drug Affordability Act (PDAA), into law, Illinois officially enacted the most comprehensive pharmacy benefit manager (PBM) reform legislation in the state’s history.

  This legislation is not just another bill signed into the books.  It represents decades of effort by pharmacists, patients, and advocates who have fought against a system that too often prioritized corporate profits over people’s health.  It is a defining moment for pharmacy in Illinois and a significant victory for communities that rely on access to local pharmacy care.

A Broken System Demanded Reform

For too long, PBMs have operated as invisible gatekeepers in our healthcare system, controlling access to prescription drugs while avoiding meaningful oversight.  Three corporations control more than 80 percent of all prescription drug claims in the United States.  With this consolidation has come rampant abuse: spread pricing that siphons dollars away from patient care, steering patients to PBM-owned pharmacies, restricting access through arbitrary “specialty drug” designations, and a pervasive lack of transparency that left payers and policymakers in the dark.

Meanwhile, pharmacies have struggled to survive.  Reimbursement rates have plummeted, audit abuse has increased, and vital community pharmacies have shuttered at an alarming rate.  Patients have suffered the consequences: limited access, delayed therapies, and higher out-of-pocket costs.

Illinois needed a solution. HB1697 delivers that solution.

The PDAA: A Comprehensive Overhaul

The Prescription Drug Affordability Act addresses the abuses of the PBM industry through a sweeping, multifaceted reform package focused on three pillars: restoring fairness, enforcing transparency and accountability, and supporting pharmacy sustainability and patient access.

Restoring Fairness and Stopping PBM Abuses

HB1697 bans spread pricing, a practice where PBMs charge health plans one amount while reimbursing pharmacies far less, pocketing the difference.  This practice has cost Illinois taxpayers hundreds of millions of dollars, as detailed in a 2023 performance audit of the Medicaid Managed Care program.

The Act prohibits PBM steering, which has long allowed PBMs to direct patients to pharmacies they own or control.  Steering includes requiring or incentivizing patients to use affiliated mail-order or specialty pharmacies, often at the expense of timely, local access. It also includes preferential reimbursement; when PBMs reimburse their own affiliated pharmacies at higher rates than they pay to independent or unaffiliated pharmacies for the same services.  These practices distort the market, undermine fair competition, and restrict patient choice.

HB1697 also mandates that 100 percent of manufacturer rebates negotiated by PBMs be passed on to the health plans or patients, ensuring that discounts are used to reduce costs and not boost PBM profits.  Additionally, the Act also eliminates false specialty drug designations.  Too often, PBMs restrict access to certain drugs by labeling them as “specialty,” only to route those prescriptions to their own pharmacies.  Under this law, patients will have greater freedom to access medications through their preferred pharmacy.

Enforcing Transparency and Accountability

For the first time in Illinois, PBMs will be subject to rigorous annual reporting requirements. HB1697 mandates the submission of detailed transparency reports to the Department of Insurance, including data on drug pricing, rebate pass-throughs, and reimbursement practices.  These reports will also be made available in summary format to health plans and consumers.

Health plans will be required to conduct annual audits of their PBMs.  The Department of Insurance is authorized to conduct regular market conduct examinations of the three largest PBMs every five years beginning in 2026.  For violations, PBMs face penalties of up to $10,000 per day, per offense.

This level of oversight is unprecedented in Illinois and is necessary to ensure accountability in a sector that has operated behind closed doors for far too long.

Supporting Pharmacy Sustainability and Patient Access

Reform alone does not keep pharmacy doors open.  HB1697 includes significant investments to strengthen pharmacy infrastructure and support access in underserved areas.

The Act expands the Critical Access Pharmacy (CAP) Program by raising its annual investment from $10 million to $45 million.  It also broadens eligibility criteria to include pharmacies in both rural and urban medically underserved communities.

A new $25 million annual grant program through the Department of Commerce and Economic Opportunity (DCEO) will provide critical infrastructure support to independent and underserved pharmacies.  

The law also authorizes an annual pharmacist dispensing cost study, conducted through an Illinois institution of higher education, to inform future reimbursement policy and ensure that pharmacies are paid fairly based on actual costs.

Finally, the law applies insurance code protections to Medicaid managed care PBMs, establishing parity in consumer and provider protections across all insurance markets in Illinois.

The Advocacy That Made This Possible

This legislative victory did not happen overnight.  It is the culmination of more than two decades of advocacy work in Illinois.  Advocacy that included every sector of pharmacy practice, from independent community pharmacies to health systems, long-term care, and specialty pharmacies.

We began laying the groundwork in the late 1990s with provisions such as “any willing provider” and protections around provider designation.  By 2019, we had secured the first major PBM regulatory framework in Illinois through Public Act 101-452, which introduced MAC transparency, PBM registration, and rebate disclosures.  But those were just the first steps.

We fought through session after session, navigating a system that often resisted reform.  The phrase “not all flowers bear fruit” often came to mind, especially when strong bills stalled or were gutted under pressure.  Still, we persisted.

Momentum accelerated in 2022 and 2023, when a Senate resolution led to a performance audit that uncovered over $200 million in PBM spread pricing practices in Illinois Medicaid.  The audit gave us the evidence we needed to push harder.

In 2023, we passed audit protections and anti-retaliation provisions to give pharmacists a stronger voice.  In early 2024, new transparency measures were added to the Illinois Public Aid Code.  These pieces became the foundation of what would ultimately become the PDAA.

Working with Senator David Koehler, Representative Natalie Manley, and a coalition of legislative leaders, the final bill was crafted in early 2025.  It cleared the Senate Executive Committee on May 28, passed the Senate on May 29, and moved swiftly through the House Executive Committee and full chamber on May 30 and 31.  This momentum was driven not just by policy but by the real stories of patients and pharmacists who made the case that access to medication is a fundamental need.

A Commitment from the Top

One of the most pivotal moments in this legislative effort came in February 2025, during Governor J.B. Pritzker’s State of the State address.  For the first time, a sitting Illinois governor publicly committed to making comprehensive PBM reform a policy priority.  His words signaled not only political momentum but also validation of the experiences shared by pharmacists and patients across the state.

By elevating the Prescription Drug Affordability Act in his policy agenda, Governor Pritzker sent a clear message that the time for transparency, fairness, and meaningful oversight had arrived.  His administration’s support helped accelerate legislative negotiations and strengthened our coalition’s ability to bring stakeholders to the table.  The Governor’s leadership was essential in pushing this bill across the finish line.

The inclusion of PDAA in the State of the State was more than symbolic.  It placed the health and accessibility concerns of Illinoisans on par with other major policy issues, and it demonstrated a willingness to stand up to entrenched special interests.  That moment gave new energy to our advocacy and helped shift the tone of the debate from “if” to “when.”

What Comes Next

HB1697 is not the end of the journey.  It is the beginning of a new chapter.  Implementation, enforcement, and accountability will be critical in ensuring that these reforms work in practice as well as they do on paper.

The majority of the Act’s provisions take effect on January 1, 2026, including the changes to the Illinois Insurance Code, the Illinois Public Aid Code, and multiple related statutes.  Some provisions, such as PBM registration fee assessments and grant funding, begin later in 2025.

As pharmacists, we must remain vigilant and engaged.  We must ensure that regulators enforce the law, that health plans comply with new requirements, and that patients see the benefits in the form of lower costs and better access.  We must also continue to advocate for fair reimbursement and sustainable business models that allow pharmacies to do what they do best; taking care of our patients.

A Final Word of Thanks

I want to thank the many pharmacists, pharmacy owners, healthcare advocates, and patients who stood with us throughout this long and difficult journey.  I also want to express my gratitude to the legislators who heard our voices and acted with courage to bring about change.

HB1697 is proof that persistent, patient-centered advocacy works.  It is proof that pharmacists can lead on policy and reform.  And it is a reminder that when we fight together, we can reshape our healthcare system for the better.

Let this be a call to all of us: the work is not done. But together, we are standing strong.