This bill introduces comprehensive regulations for pharmacy benefits managers (PBMs) in Iowa, focusing on their interactions with pharmacies and the reimbursement processes for prescription drugs. It defines key terms such as "pass-through pricing" and "spread pricing," and prohibits PBMs from discriminating against pharmacies regarding participation and reimbursement. The legislation ensures that PBMs cannot restrict a covered person's choice of pharmacy, impose penalties for selecting a pharmacy, or mandate the exclusive use of mail-order pharmacies. Additionally, it requires PBMs to notify pharmacies of any participation restrictions and guarantees equal reimbursement terms for all pharmacies within a geographical area.

Moreover, the bill establishes specific requirements for PBM contracts, mandating that they adopt a pass-through pricing model and prohibit spread pricing unless the full difference is passed through to the pharmacy for contracts executed or renewed after July 1, 2025. PBMs are required to reimburse pharmacies at rates not lower than the national average drug acquisition cost, the Iowa average acquisition cost, or the wholesale acquisition cost, along with a professional dispensing fee that meets or exceeds the Iowa Medicaid enterprise provider fee schedule. The legislation also includes provisions for an appeals process for pharmacies disputing reimbursement rates and ensures that covered persons' cost-sharing reflects any rebates received by the PBM, contributing to greater transparency and fairness in the pharmacy benefits management system in Iowa.

Statutes affected:
Introduced: 510B.1, 510B.4, 510B.8, 510B.8B