The bill establishes the Iowa Competitive Pharmacy Benefits Managers Marketplace Act, which introduces a reverse auction process for pharmacy benefits managers (PBMs) to enhance competition and reduce costs for self-funded public sector health plans. It defines key terms such as "market check," "participant bidding agreement," and "pharmacy benefits manager reverse auction," and mandates the Department of Administrative Services (DAS) to procure a technology platform capable of conducting these auctions by November 1, 2025. The platform must meet specific security and operational standards and will also serve as a pharmacy claims adjudication engine to ensure compliance with contract terms.

Additionally, the bill outlines the timeline for the first reverse auction, set to be completed by January 1, 2026, and stipulates that subsequent contracts must be awarded at least three months before the expiration of current contracts. It allows for market checks during the contract term to maintain competitiveness and grants self-funded public sector health plans the option to conduct their own reverse auctions three years after the initial contract is awarded. The bill explicitly excludes nonprofit health maintenance organizations from its provisions and allows DAS to vacate auction outcomes if bids do not meet projected cost trends. The act takes effect immediately upon enactment.