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Thursday, July 17, 2025

Sen. Arellano: House Bill 1697 'puts an end to 'spread pricing' by pharmacy benefit managers'

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Li Arellano, State Senator for Illinois | Facebook

Li Arellano, State Senator for Illinois | Facebook

State Senator Li Arellano of Illinois announced a new law aimed at regulating pharmacy benefit manager (PBM) practices to protect local pharmacies and ensure that prescription drug savings reach families and plan sponsors. This announcement was made on Facebook.

"Of all the pieces of legislation that came before me this spring session, I think my “most review required” award might go to HB1697," said Arellano, Illinois State Senator for 37th District, according to Facebook. "This bill puts an end to “spread pricing” by pharmacy benefit managers (PBMs), and was signed into law by the Governor on July 1. It prevents PBMs from pocketing extra rebates and requires that money to go directly to patients and plan sponsors. Entire regions have been losing their independent pharmacies."

House Bill 1697, enacted in Illinois in 2024, seeks to increase transparency and regulatory oversight of PBMs, particularly addressing spread pricing practices. Critics argue these practices inflate drug costs and threaten independent pharmacies. According to the Chicago Tribune, the law mandates that PBMs disclose pricing details and prohibits them from retaining excess profits from spread pricing. This move reflects a growing bipartisan concern about rising prescription costs and the influence of PBMs in the state.

A report by the Illinois Department of Healthcare and Family Services in 2023 estimated that spread pricing by PBMs cost Illinois Medicaid approximately $200 million between 2018 and 2022. The report highlighted that PBMs reimbursed pharmacies significantly less than what was billed to the state, intensifying calls for reforms like those proposed in House Bill 1697.

The National Community Pharmacists Association reported a loss of more than 150 independent pharmacies in Illinois from 2019 to 2024, representing a 21% decrease. The closures were attributed to financial pressures linked to PBM reimbursement rates and spread pricing models, with Illinois experiencing higher closure rates compared to national averages.

According to the Illinois General Assembly, Arellano is a Republican State Senator for Illinois’ 45th District. He was elected in 2022 after serving as Dixon’s mayor. His legislative focus includes healthcare transparency, small business support, and veterans’ issues, drawing from his experience as a U.S. Army veteran and local leader.

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