This bill introduces new regulations for pharmacy benefit managers (PBMs) in Iowa, focusing on enhancing transparency and fairness in prescription drug pricing. It defines "pass-through pricing" and "spread pricing," and prohibits PBMs from discriminating against pharmacies or pharmacists regarding participation, referrals, or reimbursements, provided they comply with applicable laws. The legislation mandates that PBMs cannot restrict a covered person's choice of pharmacy or impose penalties for selecting a pharmacy, and they must notify pharmacies of any participation restrictions at least 60 days in advance. Additionally, it requires that PBM contracts utilize pass-through pricing and prohibits varying cost-sharing based on the pharmacy used, ensuring that a covered person's cost-sharing reflects total rebates received by the health carrier or PBM.

Moreover, the bill mandates that PBMs reimburse pharmacies at rates equal to the national average drug acquisition cost, Iowa average acquisition cost, or wholesale acquisition cost, and pay a professional dispensing fee in line with the Iowa Medicaid enterprise provider fee schedule. Pharmacies are allowed to refuse to dispense prescriptions if the reimbursement is below their acquisition cost. All contracts related to prescription drug benefits executed or renewed after July 1, 2025, must adopt a pass-through pricing model and eliminate spread pricing unless the full difference is passed through to the pharmacy. An appeals process for pharmacies to contest reimbursement rates is also established, with the new regulations set to take effect for PBMs managing prescription drug benefits in Iowa starting July 1, 2025.

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