Regular Session
Government Affairs & Regulatory Compliance Analysis
SB1236 fundamentally restructures the contractual relationship between Pharmacy Benefit Managers (PBMs)/Health Issuers and Pharmacies by prohibiting unilateral "adverse material changes" to contracts without written mutual agreement. This legislation voids "amendment-by-notice" practices and severely restricts financial recoupment for clerical errors during audits, shifting significant leverage to network pharmacies.
Sen. Bryan Hughes·Senate Bill·Regular Session
This legislation has regulatory implications for the following Texas businesses and organizations:
Significant regulatory changes (effective 2025-09-01). Review with your legal and compliance teams to understand implications.
Affected business types:
Affected business types:
mediumModerate costs expected for implementation.
JD Key Consulting provides government affairs and regulatory strategy services. We help businesses navigate Texas agencies, understand legislative impacts, and advocate for their interests.
JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.
Key implementation requirements and action items for compliance with this legislation
JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.
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This bill's path through the Texas Legislature
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Common questions about SB1236
SB1236 fundamentally restructures the contractual relationship between Pharmacy Benefit Managers (PBMs)/Health Issuers and Pharmacies by prohibiting unilateral "adverse material changes" to contracts without written mutual agreement. This legislation voids "amendment-by-notice" practices and severely restricts financial recoupment for clerical errors during audits, shifting significant leverage to network pharmacies.
SB1236 was authored by Texas Senator Bryan Hughes during the Regular Session.
SB1236 was signed into law by Governor Greg Abbott on May 27, 2025.
SB1236 is enforced by Texas Department of Insurance.
The regulatory priority for SB1236 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.
The cost impact of SB1236 is estimated as "medium". This may vary based on industry and implementation requirements.
SB1236 addresses topics including electronic information systems, health care providers, insurance, insurance--health & accident and pharmacies & pharmacists.
Key dates for SB1236: Effective date is 2025-09-01. Rulemaking: Commissioner may adopt rules to implement Chapter 1369, specifically regarding ID card identifiers and contract disclosures. (None specified in text). Consult with legal counsel regarding applicability.
SB1236 establishes the following penalties: civil penalty of Contract provision voided for Unilateral adverse material changes to pharmacy contracts by PBMs are void and unenforceable.; civil penalty of Contract provision voided for Failure to include specific opt-out notices with proposed adverse material changes renders the change void.; administrative penalty of Recoupment limitation for PBMs/Issuers may not recoup drug costs (only dispensing fees) for clerical errors that result in overpayment.. Consult with legal counsel for specific applicability to your situation.
SB1236 primarily affects healthcare providers and medical facilities, insurance companies and financial institutions. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.
JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.
