Policy Watch: July 2026
Welcome!
Navitus is pleased to share the July edition of The Beacon: Policy Watch, our monthly update to inform our clients and consultants about legislative and regulatory developments affecting pharmacy benefits. We’re here every month to share thoughts, informed by the Navitus Government Relations and Legal teams. Our goal is to keep you prepared and ahead of change.
Legislative updates
Colorado
- Effective January 1, 2027:
Health plans and utilization review organizations must implement safeguards governing the use of artificial intelligence in coverage and utilization review decisions, including:- Decisions must consider an individual’s clinical history and medical information
- Determinations cannot rely solely on group-based data
- AI systems must be applied fairly and without discriminatory impacts
- Documentation, audit trails and governance controls are required
- Ongoing performance reviews must be conducted
- Effective August 12, 2026, January 1, 2027, and January 1, 2028:
Colorado is expanding access to non-opioid pain management alternatives by:- Limiting utilization management requirements for non-opioid therapies so they are not more restrictive than those applied to opioids
- Limiting member cost sharing for non-opioid alternatives
- Requiring health plans to cover at least one clinically appropriate non-opioid prescription alternative
- Effective January 1, 2028:
Health plans must apply eligible prescription drug costs paid directly by members through pharmacies, providers or direct-to-consumer platforms toward deductible and out-of-pocket maximum calculations, subject to certain conditions.
What it means for you:
Colorado continues to advance policies to govern AI use, expand access to non-opioid therapies and increase transparency around prescription drug spending. Plan sponsors may want to evaluate utilization management practices, formulary strategies and member cost-sharing processes in preparation for these changes.
Connecticut
- Effective July 1, 2026:
New requirements establish timelines and procedural standards for external review organizations handling utilization review appeals.
- Effective January 1, 2027:
Insurers must provide 90 days of notice to prescribing providers before certain formulary changes and publish information about covered drugs and products being removed from formularies before open enrollment.
What it means for you:
These changes increase transparency around formulary management and may require enhanced communication strategies with providers and members.
Louisiana
- Effective August 1, 2026:
Coverage for prescribed oral anti-cancer medications must be provided no less favorably than intravenous or injectable treatments. Plans may not impose utilization management or cost-sharing requirements that create greater barriers for oral therapies.
- Effective June 12, 2026:
Louisiana enacted several pharmacy and prescription drug reforms, including:- Favorable formulary placement and cost-sharing requirements for lower-cost generics and biosimilars
- New pharmacy reimbursement standards
- Additional restrictions on pharmacy audits and recoupment activities
- Effective January 1, 2027, and January 1, 2028:
Additional pharmacy benefit manager (PBM) requirements include:- Fiduciary-style obligations requiring PBMs to act in the best interests of plans and members
- Enhanced transparency requirements
- Restrictions on spread pricing
- Expanded rebate pass-through requirements
- Limitations on formulary changes and certain utilization management practices
What it means for you:
Louisiana has become one of the most active states in PBM regulation. These requirements may affect contracting arrangements, formulary administration, rebate management and pharmacy network operations.
Ohio
- Effective June 30, 2026, with licensing required by July 1, 2027:
Ohio established comprehensive PBM licensure, reporting and enforcement requirements, including state authority to impose penalties and corrective actions. PBMs must also disclose certain contractual relationships related to PBM services.
What it means for you:
Organizations operating in Ohio should anticipate additional regulatory oversight and reporting obligations related to PBM operations.
Rhode Island
- Effective January 1, 2027:
Rhode Island enacted PBM licensure, reporting and enforcement requirements, while also establishing new standards related to:- Pharmacy appeals processes
- Member cost sharing
- Pharmacy communications with patients
- Enforcement and transparency requirements
What it means for you:
The law expands state oversight of PBMs and introduces new operational, reporting and compliance considerations.
Vermont
- Effective July 1, 2026:
Vermont established a prescription drug discount card program.
- Effective June 18, 2026:
Additional legislation:- Requires reporting of certain high-cost drugs and significant price increases
- Expands access to HIV pre-exposure prophylaxis without cost sharing when recommended by the U.S. Preventive Services Task Force
- Requires notice before formulary drug removals
What it means for you:
These measures reinforce prescription drug affordability and transparency efforts while increasing notice requirements related to formulary management.
Regulatory Updates
Florida
- Effective July 15, 2026:
Florida extended its Medicaid reimbursement methodology for covered outpatient prescription drugs, maintaining reimbursement based on acquisition costs, wholesale acquisition costs, state maximum allowable costs and professional dispensing fees.
What it means for you:
The extension provides continued reimbursement stability for Medicaid pharmacy services while preserving existing payment methodologies.
Massachusetts
- Effective June 5, 2026:
Massachusetts adopted requirements for managed care accreditation and utilization review compliance standards, including ongoing accreditation obligations for carriers.
What it means for you:
Health plans operating in Massachusetts may need to evaluate accreditation status and utilization review processes to ensure compliance.
Oregon
- Effective July 1, 2026:
Oregon expanded care coordination requirements for certain Medicaid members, including health risk assessments and ongoing care management services.
What it means for you:
Enhanced care coordination requirements may influence population health management and Medicaid service delivery strategies.
Legal Updates
Federal appeals court supports ERISA plan flexibility
In a recent decision, the Eighth Circuit U.S. Court of Appeals upheld dismissal of a challenge to a PBM’s maintenance medication dispensing requirements and determined that an Arkansas network adequacy law was pre-empted by ERISA. The ruling may provide additional certainty for ERISA plan administration in the states of the Eighth Circuit: Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.
What it means for you:
The decision reinforces existing ERISA preemption principles and may help preserve administrative flexibility for employer-sponsored benefit plans in affected states.
Other Updates
Continued momentum for electronic prior authorization
States continue to adopt interoperability standards designed to modernize prior authorization and prescription benefit information exchange. Legislative actions in Maryland, Alaska, Washington and California require or support electronic prior authorization processes, real-time benefit information and application programming interfaces that improve communication among providers, plans and members. At the federal level, CMS is considering a proposed rule that would establish new interoperability standards and prior authorization timelines for certain government-sponsored programs and federally facilitated exchange plans.
What it means for you:
The health care industry continues to move toward electronic, standardized prior authorization processes. Plan sponsors should expect increasing emphasis on digital information exchange, transparency and faster authorization decision timelines in coming years.
Closing thought
As state-level policy continues to evolve rapidly, these developments reflect broader trends toward expanded access, increased oversight and greater transparency. Navitus remains committed to helping you navigate this complexity with clarity and confidence. If you’d like to discuss how any of these updates may affect your plan or members, please contact your Navitus representative.
Thank you for reading The Beacon: Policy Watch. We’ll see you next month.
This newsletter is for educational purposes only, and it may not contain all laws enacted throughout the country. It should not be used as a primary source, and it is not legal advice intended to substitute for legal counsel. Please seek appropriate legal or other professional advice before taking any actions related to subject matter discussed here.
Previous Policy Watch Issues
No posts
Stay Informed and Connected
Receive expert insights, healthcare tips, and important updates on pharmacy benefits, drug recalls, and more—straight to your inbox.
CLARITY FOR ACTION
Gain Clarity: Navitus 10th Annual Drug Trend Report Ready to Download
Our 2025 report provides transparent, data-driven insight to help plans, plan sponsors and consultants navigate an increasingly complex prescription drug landscape.
Related blogs
Navigating Healthcare and Improving Outcomes
PBM 101: Demystifying the Complex World of Specialty Drugs
Unless you work in the pharmacy benefit management (PBM) industry, it’s easy to assume that a “specialty drug” is simply a more expensive prescription. In reality, specialty medications sit in a separate category, with different rules and far bigger consequences…
