SPTR UPDATE (5/26/2026)

With many state legislative sessions wrapping up in the coming weeks, we wanted to provide an update on some notable legislative activity in 2026 that we have been tracking over the last few months.

In short, several key Prescription Drug Affordability Board (PDAB) proposals have recently failed, including a governor veto alongside some bills which died in committee; however, some PDAB/transparency legislation remains actively moving through state legislatures, while similar measures in several other states remain pending or stalled as their respective legislative sessions wind down. Nonetheless, a recent judicial update is likely to spur new and enhanced state requirements.

Below are some notable updates:

• Oregon PDAB given expanded capabilities

In April 2026, Oregon updated its PDAB's capabilities by amending the PDAB's drug selection process. The amendment also expands the affordability review criteria, adding new considerations such as whether a drug has contributed to health inequities in communities of color.

• Illinois PDAB likely to be enacted

This bill (originally passed in the Senate and then passed in the House on May 21, 2026) is back in the Senate for a concurrence vote on a recent House amendment. With the legislative session adjourning on May 31, it is highly likely to reach the governor's desk, though Governor Pritzker has not yet guaranteed a signature. If enacted, this PDAB would be another example of a PDAB authorized to set upper payment limits for prescription drugs.

• Virginia PDAB (Prescription Drug Affordability Board) bill vetoed by Governor

On May 19, 2026, Gov. Abigail Spanberger vetoed legislation that would have created a state board to review prescription drug costs, saying that evidence from other states shows that such boards do not achieve the goal of lower prices.

• Bills penalizing "unsupported" or "excessive" price increases

An interestingly novel bill in Rhode Island, if enacted, would penalize pharmaceutical manufacturers for taking an "unsupported price increase" (i.e., an increase in which there was as no, or inadequate, new clinical evidence to support the price increase). To determine this, the state would rely upon analyses prepared by the Institute for Clinical and Economic Review (ICER) annual report.

The penalty in any calendar year would equal 80% of the difference between the revenue generated by sales within the state of the identified drug and the revenue that would have been generated if the manufacturer had maintained the WAC from the previous calendar year (adjusted for inflation).

Similarly, a New Jersey bill attempts to directly penalize manufacturers if a drug's WAC increases by 50% or more in a single year.

However, based on current progress, it is unlikely that either of these bills will be passed in their current form.

• Judicial update expected to further state regulation

On May 18, 2026, the U.S. Supreme Court formally declined to hear multiple pharmaceutical industry challenges to the federal Medicare Drug Price Negotiation Program. By leaving lower court rulings intact, the Supreme Court has effectively signaled a reluctance to invalidate government-negotiated drug pricing frameworks. Legal analysts note this is expected to embolden state legislatures to aggressively pursue their own PDABs and upper payment limits with less fear of constitutional challenges.