Fiscal Note
Fiscal Services Division
HF 423 – Health Insurance Providers, Section 340B Program Participants (LSB1106HV)
Staff Contact: Xavier Leonard (515.725.0509) xavier.leonard@legis.iowa.gov
Fiscal Note Version – New
Description
House File 423 relates to contract pharmacies and covered entities that participate in the 340B
drug program and does the following:
• Defines terms.
• Prohibits plans, carriers, third-party administrators (TPAs), and pharmacy benefits managers
(PBMs) from providing discriminatory reimbursement amounts for prescription drugs or
dispensing fees on the basis of a covered entity or a contract pharmacy’s status as a
covered entity or contract pharmacy.
• Prohibits discrimination on the basis of participation in a 340B drug program, in addition to
the status as a covered entity or a contract pharmacy, for the following:
• Imposing contractual terms and conditions, as specified in the Bill.
• Placing restrictions or imposing requirements on an individual that chooses to obtain a
covered outpatient drug from a covered entity of a contract pharmacy.
• Refusing to contract with a covered entity or a contract pharmacy based on any criteria
that is not applied equally.
• Imposing restrictions that interfere with the ability to maximize discounts through
participation in a 340B drug program.
• Permits the Commissioner of Insurance to take enforcement action under the
Commissioner’s authority to enforce compliance. After notice and hearing, the
Commissioner may issue any order or impose any penalty pursuant to Iowa Code section
507B.7 upon finding a violation of this Bill.
• Establishes that a violation of this Bill violates Iowa Code section 507B.4(3), pertaining to
unfair or deceptive acts or practices in the business of insurance.
• Permits the Commissioner to adopt rules implementing the provisions of this Bill.
• Clarifies that if any provisions of this Bill are in conflict with applicable State or federal law,
that the State or federal law will prevail to the extent necessary to eliminate the conflict.
• Establishes applicability.
Background
The 340B drug program refers to the program created pursuant to the Veterans Health Care Act
of 1992, codified as §340B of the federal Public Health Services Act.
House File 423 is estimated to impact approximately 25.8% of the Iowa population (822,000).
This includes individual coverage, fully insured small and large employer groups, self-insured
public employees, and the State of Iowa Plan.
Of the individuals not covered by the mandate, approximately 45.2% are covered by
government-sponsored health insurance, 23.0% are covered by employer coverage that is
governed by the federal Employee Retirement Income Security Act of 1974 (ERISA), and the
remaining 6.0% are uninsured.
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Source: Iowa Insurance Division
Assumption
The Iowa Insurance Division will not need to hire additional full-time equivalent (FTE) positions
to enforce the provisions of this Bill.
Fiscal Impact
House File 423 has the potential to generate increased costs to the State of Iowa and the State
of Iowa health plan, but the fiscal impact is unknown.
Sources
Board of Regents
Iowa Insurance Division, Department of Commerce
Legislative Services Agency
Wellmark
/s/ Jennifer Acton
March 6, 2023
Doc ID 1370437
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov
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