SB1225 • 2026

pharmacies; cost sharing requirement; rebates

SB1225 - pharmacies; cost sharing requirement; rebates

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Brian Fernandez
Last action: 2026-01-21
Official status: Senate second read
Effective date: Not listed

Plain English Breakdown

The bill passed the legislature but has no listed effective date; enforcement depends entirely on contract dates after December 31, 2026.

SB1225: Pharmacy Rebates and Cost Sharing

This law requires pharmacy benefit managers to calculate patient costs using a drug price reduced by at least all rebates received.

What This Bill Does

Requires cost sharing for prescription drugs to be calculated based on a price reduced by at least 100% of any rebates received.
Prohibits pharmacy benefit managers and third-party payors from keeping rebate money or other price concessions as revenue.
Allows these companies to lower patient costs even more than the law requires if they choose.

Who It Names or Affects

Pharmacy benefit managers
Third-party payors such as insurance companies
Covered individuals who are insured or enrolled in health care plans

Terms To Know

Cost sharing requirement: Any copayment, coinsurance, deductible, or other amount a patient must pay for a prescription drug.
Rebate: Price reductions like negotiated concessions and performance-based payments, plus administration fees collected from drug makers.

Limits and Unknowns

This law only applies to insurance contracts entered into, renewed, extended, or modified after December 31, 2026.
The official text does not state a specific effective date for enforcement beyond the contract timeline.

Bill History

2026-01-21 Senate
Senate second read
2026-01-20 Senate
Senate Rules: None
2026-01-20 Senate
Senate Finance: None
2026-01-20 Senate
Senate first read

Official Summary Text

SB1225 - pharmacies; cost sharing requirement; rebates

Current Bill Text

Read the full stored bill text

SB1225 - 572R - I Ver

REFERENCE TITLE:
pharmacies; cost sharing requirement; rebates

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1225

Introduced by

Senator
Fernandez

AN
ACT

amending title 20, chapter 25, article 2,
arizona revised statutes, by adding section 20-3337; relating to pharmacy
benefit managers.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 20, chapter 25, article 2,
Arizona Revised Statutes, is amended by adding section 20-3337, to read:

START_STATUTE
20-3337.

Pharmacy benefit managers; third-party payors; cost sharing
requirement; prescription drugs

A. A pharmacy benefit manager or a
third-party payor shall require that a covered individual's cost sharing
requirement for a prescription drug be calculated at the point of sale based on
a price that is reduced by an amount equal to at least one hundred percent of
all rebates that are received by the pharmacy benefit manager or third-party
payor for the prescription drug.

B. A pharmacy benefit manager or
third-party payor may not retain any portion of a rebate or other price
concession as a source of revenue.

C. This section does not prevent a
pharmacy benefit manager or third-party payor from decreasing a covered
individual's cost sharing requirement by an amount greater than what is
required in subsection A of this section.

D. For the purposes of this section:

1. "Cost sharing
requirement" means any copayment, coinsurance, deductible or other covered
individual obligation for a covered prescription drug.

2. "covered individual"
means an insured, enrollee or subscriber who is eligible to receive benefits
through a health care plan as defined in section 20-3335.

3. "Rebate" means:

(
a
) Negotiated
price concessions, including base price concessions and reasonable estimates or
any price protection rebates and performance-based rebates, that may
accrue directly or indirectly to the pharmacy benefit manager or third-party
payor during the coverage year from a manufacturer, dispensing pharmacy or
other party in connection with dispensing the prescription drug.

(
b
) Administration
fees and other payments that are collected by the pharmacy benefit manager or
third-party payor from a manufacturer.
END_STATUTE

Sec. 2.
Applicability

This act applies to subscription
contracts, policies and evidences of coverage that are entered into, renewed,
extended or modified from and after December 31, 2026.