Critics say these companies drive up the cost of medicine. NC is reining them in.
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- Gov. Stein signed bipartisan laws targeting PBM practices and drug pricing tactics.
- The SCRIPT Act bars PBMs from pharmacy steering and regulates rebates.
- New laws also aim to bolster drug enforcement, aid crime victims and assist veterans.
Gov. Josh Stein signed four bills into law Wednesday morning dealing with a range of issues, including pharmacies and drug costs, public safety and support for veterans and their families.
The leader of a pharmacists’ group says the new regulations for her industry will target “one of, if not the greatest, contributor to our high medication costs.”
The Democratic governor has been working through a raft of bills lawmakers sent him last month before adjourning for a summer break, signing many while also using his veto pen to block bills that sought to increase state and local cooperation with immigration authorities, allow concealed handguns without a permit, ban diversity, equity, and inclusion programs and initiatives from state government and in K-12 and higher education, and more.
Each of the bills Stein signed on Wednesday arrived on his desk after clearing the Republican-controlled General Assembly in votes that were overwhelmingly bipartisan.
One of the bills, named the SCRIPT Act, seeks to support independent pharmacies and regulate the prescription drug market. Two others dealing with criminal justice and public safety contain a number of provisions that, among other things, aim to help victims of domestic violence and hold drug dealers and traffickers accountable for selling fentanyl.
The fourth bill, the Military and Veteran Support Act, contains provisions to help veterans and their families enroll their children in school, obtain in-state college tuition, and renew their driver’s licenses.
Reining in pharmacy benefit managers
For much of the year, it appeared House and Senate lawmakers would again fail to agree on how to regulate the prescription drug market and rein in pharmacy benefit managers — the middlemen who negotiate discounts with manufacturers and wholesalers on behalf of insurers.
But this year, the chambers bridged their differences and unanimously passed the SCRIPT Act. Leading much of those efforts in the legislature were Sen. Benton Sawrey, a Clayton Republican, and Rep. Heather Rhyne, a Lincolnton Republican, both of whom attended Wednesday’s bill signing.
The legislation aims to bar PBMs from steering patients to their own or preferred pharmacies, including mail-order services, and requires them to allow any willing pharmacy to join their networks.
The bill mandates that most rebate savings be passed along to patients. It prohibits PBMs from paying their affiliated pharmacies more than others, and adds new reporting requirements. The bill regulates Pharmacy Services Administrative Organizations, which represent independent pharmacies in negotiations.
Penny Shelton, executive director of the North Carolina Association of Pharmacists, said on Wednesday she has been a pharmacist for 34 years and that in “all that time, the predatory and often egregious tactics of PBMs are without a doubt the largest, most complex and tremendously harmful issue our profession has faced.”
Shelton said that after graduating from pharmacy school, she went to work for a rural, independently owned community pharmacy — the type now struggling to stay open in North Carolina and nationwide.
At the time, Shelton said, PBMs primarily processed claims for prescriptions covered by insurance, but many patients paid in cash and didn’t have prescription drug coverage.
“Back then, if they did their job well, no one gave them a second thought. Fast forward three decades, and these middlemen, driven by corporate greed, have increasingly and insidiously taken more and more control of your health care,” she said.
PBMs are often owned or are affiliated with mail-order or retail chains —for example, CVS Health owns the PBM CVS Caremark. PBMs have been accused of steering customers toward their own pharmacies.
Shelton said the United States is the only country in the world that uses PBMs — and that medication costs are far higher here than in other developed countries.
“PBMs are not the only reason for high drug costs in the U.S., but they are one of, if not the greatest, contributor to our high medication costs,” she said.
A group that represents PBMs nationwide said the organizations are working to lower drug costs.
“While we appreciate the legislature working with all stakeholders to improve the bill, we have concerns that the legislation may have unintended consequences that could raise costs for North Carolina employers and consumers,” Connor Rose, with the Pharmaceutical Care Management Association, said in an email.
Asked which pieces of the legislation could lead to increased costs, Rose pointed to the part of the bill requiring 90% of prescription drug rebates to be passed to consumers at the point-of-sale.
He wrote that employers and other plan sponsors already have the option of applying rebates negotiated by PBMs at the point-of-sale, but many choose not to because they use those rebates to “’buy down’ the total cost of the plan they are offering as a hedge against rising premiums.”
“So, while a segment of patients taking brand drugs may benefit having rebates applied at the point-of-sale, costs to employers and other premium payors may increase,” he wrote.
He noted that the State Health Plan is not required to implement that provision.
As for CVS Caremark — which is the State Heatlh Plan’s PBM — the company “works every single day to lower prescription drug costs for North Carolinians, and we look forward to collaborative discussion with the state legislature on ways to continue that important work,” Shelly Bendit, senior manager of corporate communications for CVS Health, said in an email.
Positives outweigh concerns for Stein on other bills
With each of the other three bills Stein signed on Wednesday, he took time to point out specific provisions that he had concerns about, even urging lawmakers to rethink certain ideas as he went ahead and allowed the bills to take effect.
Signing Senate Bill 429, the 2025 Public Safety Act into law, Stein praised lawmakers for provisions in the omnibus crime legislation that would help more victims of domestic violence hold abusers accountable in court and obtain protective orders to keep themselves safe.
Stein said he was signing the bill because of its increased criminal penalties for the sale of fentanyl and carfentanil, a much more potent analog of the drug, saying he believes “it is critically important to do everything we can to hold dealers and traffickers accountable for peddling this poison to our communities.”
At the same time, Stein said he had “real concerns” about increasing penalties for possession of fentanyl, which is currently punished as a felony under state law. Stein said he was worried about people suffering from addiction facing harsher penalties, telling lawmakers and others in attendance that “we cannot arrest our way out of this crisis.”
Stein also urged lawmakers to reconsider limitations on expenditures from attorney trust accounts that he said had been vital in providing victims of natural disasters, most recently in the aftermath of Helene, access legal aid and services.
Signing into law the other criminal justice bill, named the Law and Order Act, Stein praised the effort by lawmakers to increase and revise punishments for burglary and theft in homes and workplaces, reckless driving and street racing that causes serious injury or death, and assaults against utility or communications workers.
Stein did, however, express reservations about a provision that targets mass picketing at businesses and allows employers who face unlawful conduct as defined under the state’s Workplace Violence Prevention laws to obtain a restraining order. Stein said he was concerned about the measure “potentially impinging on people’s First Amendment rights.”
The final bill Stein signed into law on Wednesday morning aims to support the state’s active-duty military personnel and veterans, and their families.
Stein said he wants North Carolina to “be the best state for military personnel and veterans in the country,” and said one way to do that is to make it easier for families to settle down when moving here during a new deployment.
He praised the bill’s provisions that aim to help military families enroll their children in school by giving them more time to provide proof of residency, and help certain honorably discharged veterans receive in-state tuition.
Having signed these four bills into law, Stein needs to make decisions on eight additional bills that remain on his desk.
He has 10 days to take action on bills from the date they are presented to him after being passed by both chambers, which gives him until Friday to act on the eight remaining bills.
This story was originally published July 9, 2025 at 12:44 PM.
