The bill establishes the Iowa Competitive Pharmacy Benefits Managers Marketplace Act, which introduces a reverse auction process for pharmacy benefits managers (PBMs) to enhance the procurement of prescription drug benefits for self-funded public sector health plans. The Department of Administrative Services (DAS) is mandated to enter into contracts for PBM services and to procure a technology platform capable of conducting these reverse auctions by November 1, 2025. The bill outlines the requirements for the technology platform, including its ability to automate the bidding process, evaluate proposals in real-time, and perform detailed reviews of pharmacy claims. Additionally, the bill prohibits DAS from awarding contracts to any vendor that is a PBM or affiliated with one, ensuring a competitive and unbiased bidding environment.

Furthermore, the bill stipulates that the first reverse auction must be completed by July 1, 2026, with subsequent contracts awarded no later than three months before the expiration of existing contracts. It also allows for market checks during the contract term to maintain competitive pricing. A no-pay option is introduced, requiring the winning PBM to cover the costs of the technology platform through a per-prescription fee. The legislation applies to group benefit plans under Chapter 509A, excluding certain nonprofit health maintenance organizations, and allows self-funded private sector health plans to participate in future reverse auctions after the initial contract is awarded. The bill emphasizes the autonomy of participating health plans in determining their prescription drug formularies and benefit designs.