Overall Vote Recommendation

Yes

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

SB 493 seeks to protect and promote transparency in the communication between pharmacists, pharmacies, and health plan enrollees or sponsors regarding prescription drug benefits. It introduces a new provision—Section 562.0035—to Subchapter A, Chapter 562 of the Texas Occupations Code. This section prohibits any contract, agreement, or policy that restricts a pharmacist or pharmacy from discussing cost-related details or other relevant service aspects with patients or health plan sponsors.

The bill explicitly empowers pharmacists and pharmacies to inform enrollees about differences in out-of-pocket costs for prescription drugs when comparing payment through insurance to paying directly without submitting a claim. This aims to help consumers make better-informed, cost-effective decisions. Furthermore, the legislation ensures that pharmacists and pharmacies can communicate with health plan sponsors about prescription drug benefits, including issues related to reimbursement, network adequacy, pharmacy services, and potential partnerships.

SB 493 responds to growing concerns about the opaque practices of pharmacy benefit managers (PBMs) and insurers that may limit a provider's ability to discuss pricing or plan options freely. The bill is narrowly tailored to apply only to new or amended contracts from its effective date—September 1, 2025—forward. By reinforcing the rights of pharmacists to speak freely and protect consumers from hidden costs, the legislation promotes greater transparency and supports patient choice in the Texas healthcare system.

The Committee Substitute for SB 493 significantly revises the structure and focus of the originally filed version while retaining its core intent to promote transparency in prescription drug pricing. The original bill was drafted under the Texas Insurance Code (Chapter 1369), targeting insurance providers and pharmacy benefit managers (PBMs) directly. It included a detailed list of health plans—ranging from private insurance and Medicaid to school districts and church-based benefit boards—ensuring that nearly all health benefit structures operating in Texas would fall under the law's reach. It also contemplated the need for federal waivers before implementation for certain programs, indicating a broader and potentially more complex regulatory scope.

In contrast, the Committee Substitute takes a more streamlined approach by moving the provisions to the Texas Occupations Code (Chapter 562), which governs the practice of pharmacy. Rather than regulating insurers, the substitute bill places obligations on pharmacists and pharmacies directly, prohibiting them from entering into contracts that restrict their ability to share drug pricing information with patients or communicate with health plan sponsors. This revised version omits the lengthy applicability clause and any mention of federal waiver requirements, simplifying both the bill’s legal structure and its implementation.

Perhaps the most notable expansion in the substitute is the inclusion of a new protected activity: allowing pharmacies to communicate with health plan sponsors not only about drug costs but also about broader operational matters such as network adequacy, reimbursement practices, and pharmacy services. This addition reflects a shift from purely consumer-focused transparency to also ensuring open dialogue between providers and payers. Overall, the substitute version narrows the regulatory target while expanding the types of protected communications, making the bill easier to implement while also enhancing its impact on transparency and professional autonomy in pharmacy practice.

Author (1)

Lois Kolkhorst

Co-Author (4)

Cesar Blanco

Molly Cook

Kevin Sparks

Royce West

Sponsor (1)

Trey Wharton

Contact the Author

Sen. Lois Kolkhorst

Capitol Phone:

(512) 463-0118

Capitol Office:

CAP GE.4

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), SB493 would have no significant fiscal implication to the State of Texas. The assessment assumes that any administrative or operational costs incurred by agencies as a result of the bill could be absorbed using existing resources. Therefore, the implementation of the bill is not expected to require additional appropriations or staffing expansions.

Additionally, the bill is projected to have no significant fiscal impact on local governments. Since the measure primarily affects contractual communications between private pharmacies, pharmacists, and health benefit plans—rather than imposing mandates on state or local entities—it does not trigger new obligations or financial burdens for cities, counties, or other political subdivisions.

The Texas Board of Pharmacy is listed as a source agency for the fiscal analysis, suggesting that while it may have a role in interpreting or promoting compliance with the new disclosure provisions, the agency does not anticipate needing extra funding to fulfill those responsibilities. In summary, SB 493 is fiscally neutral and manageable within current budgetary frameworks at both the state and local levels.

Vote Recommendation Notes

SB 493 is a well-targeted measure designed to increase transparency in the pharmaceutical supply chain and reduce consumer prescription costs through information access. The bill prohibits so-called "gag clauses" that prevent pharmacists and pharmacies from informing patients when the out-of-pocket (cash) price of a medication is lower than the cost using insurance. According to data cited in the bill analysis, patients may unknowingly overpay—sometimes significantly—when unaware of cheaper, non-insurance alternatives. This lack of transparency affects affordability and consumer choice, undermining both individual liberty and market efficiency.

The bill, as substituted, also prohibits contractual restrictions on pharmacists' ability to communicate directly with health benefit plan sponsors regarding benefits, services, and reimbursements. This broader protection promotes operational transparency and accountability, particularly in relationships involving pharmacy benefit managers (PBMs), who are frequently scrutinized for opaque pricing practices. By amending the Occupations Code rather than the Insurance Code, the committee substitute focuses specifically on pharmacists and pharmacies rather than attempting to regulate insurers directly—streamlining enforcement and avoiding complications with overlapping federal regulations.

From a fiscal perspective, the Legislative Budget Board has confirmed that the bill carries no significant cost to state or local governments, and any implementation needs can be absorbed using existing resources. The bill does not expand government power or create new regulatory agencies. Instead, it reinforces individual liberty and free enterprise by ensuring that consumers and providers can engage in transparent, market-based exchanges without artificial barriers imposed by third-party contracts.

Given its alignment with multiple liberty principles—particularly individual liberty, personal responsibility, and free enterprise—and the absence of fiscal burden or regulatory overreach, Texas Policy Research recommends that lawmakers vote YES on SB 493 as a prudent, rights-affirming policy that corrects a market distortion and empowers consumers in their healthcare decisions.

Individual Liberty: At its core, the bill enhances individual liberty by ensuring that patients have access to complete and transparent information about their prescription drug costs. Prohibiting “gag clauses” allows pharmacists to freely inform patients when a medication's cash price is lower than their insurance co-pay. This empowers consumers to make informed healthcare decisions, which is essential for preserving personal autonomy and the right to make choices without unnecessary interference or withheld information.
Personal Responsibility: The bill also promotes personal responsibility by equipping individuals with the knowledge necessary to manage their own healthcare expenses. When patients know all their cost options, they are better able to compare, choose, and take financial accountability for their prescriptions. This fosters a healthcare environment in which individuals are active participants rather than passive recipients.
Free Enterprise: The bill strikes a blow against anti-competitive practices by curbing the contractual restrictions often imposed by pharmacy benefit managers (PBMs) and insurers. These “gag clauses” distort the market by limiting information and inhibiting open price competition. By ensuring that pharmacists can engage in transparent communication with both consumers and plan sponsors, the bill restores a more level playing field and reinforces the principle of free enterprise—a system where competitive forces, not opaque contracts, guide transactions.
Private Property Rights: The bill does not create any new restrictions or intrusions on private property rights. It merely defines the boundaries of permissible contractual terms in regulated professional relationships, such as those between pharmacists and PBMs or insurers.
Limited Government: Importantly, the legislation does not expand the size or scope of government. It imposes no new regulatory agency, no new enforcement bureaucracy, and no new taxes or spending. It simply bars restrictive language in private contracts that undermines consumer choice. This aligns with the principle of limited government by achieving policy goals without expanding state power or infrastructure.

View Bill Text and Status