House File 2384 H-8198 Amend House File 2384 as follows: 1 1. Page 1, before line 1 by inserting: 2 < DIVISION I 3 PHARMACY BENEFITS MANAGERS AND PRESCRIPTION DRUG BENEFITS > 4 2. Page 2, line 3, by striking < acquisition > and inserting 5 < invoice > 6 3. Page 2, line 4, by striking < acquisition > and inserting 7 < invoice > 8 4. Page 2, line 11, by striking < acquisition > and inserting 9 < invoice > 10 5. Page 2, by striking lines 21 and 22. 11 6. Page 2, after line 29 by inserting: 12 < ___. “Pharmacy invoice cost” means the cost to a 13 pharmacy for a prescription drug as invoiced by a wholesale 14 distributor. > 15 7. Page 3, by striking lines 22 and 23 and inserting: 16 < 3. A pharmacy benefits manager shall act in the best 17 interest of each health carrier for whom the pharmacy benefits > 18 8. Page 3, by striking lines 27 through 31. 19 9. Page 5, line 18, by striking < maximum allowable cost for > 20 10. Page 5, line 19, by striking < that drug at > and 21 inserting < total amount that > 22 11. Page 5, line 20, after < order > by inserting < is 23 reimbursed > 24 12. Page 5, line 32, after < the > by inserting < pharmacies 25 participating in the > 26 13. Page 5, line 32, by striking < plan > and inserting 27 < plan’s network > 28 14. Page 5, line 33, by striking < A > and inserting 29 < Excluding incentives in value-based programs established by a 30 health carrier or a pharmacy benefits manager to promote the 31 use of higher quality pharmacies, a > 32 15. Page 6, by striking lines 6 through 25 and inserting: 33 < 7. For purposes of calculating a covered person’s 34 contribution toward the covered person’s cost-sharing, a 35 -1- HF 2384.3888 (1) 89 ko/rn 1/ 8 #1. #2. #3. #4. #5. #6. #7. #8. #9. #10. #11. #12. #13. #14. #15.

pharmacy benefits manager shall include all cost-sharing paid 1 by the covered person and all cost-sharing paid by any other 2 person on behalf of the covered person. If, however, this 3 requirement will result in health savings account ineligibility 4 under section 223 of the Internal Revenue Code, this 5 requirement shall only apply to the covered person’s deductible 6 for a health savings account qualified-high deductible health 7 plan after the covered person has satisfied the minimum 8 deductible under section 223 of the Internal Revenue Code, 9 except for items or services that are preventive care, in which 10 case, the requirement shall apply regardless of if the minimum 11 deductible under section 223 of the Internal Revenue Code has 12 been satisfied. For purposes of this section, “preventive care” 13 means the same as under section 223(c)(2)(C) of the Internal 14 Revenue Code. > 15 16. Page 7, line 15, by striking < acquisition > and inserting 16 < invoice > 17 17. By striking page 7, line 25, through page 8, line 1. 18 18. Page 8, by striking lines 15 and 16 and inserting 19 < directly or indirectly except in the following circumstances: > 20 19. Page 8, before line 17 by inserting: 21 < a. The claim is found not to be a clean claim during the 22 course of a routine audit. 23 b. The claim submission was fraudulent. 24 c. The claim submission was a duplicate submission of a 25 claim for which the pharmacy had already received payment. > 26 20. Page 8, line 19, by striking < cost, > and inserting < cost 27 or reimbursement rate > 28 21. Page 8, by striking line 20. 29 22. Page 8, line 24, after < cost > by inserting < or the 30 reimbursement rate > 31 23. Page 8, line 25, by striking < acquisition > and inserting 32 < invoice > 33 24. Page 8, line 33, by striking < seven > and inserting 34 < thirty > 35 -2- HF 2384.3888 (1) 89 ko/rn 2/ 8 #16. #17. #18. #19. #20. #21. #22. #23.

25. Page 9, line 7, after < cost > by inserting < or the 1 reimbursement rate > 2 26. Page 9, line 11, by striking < rebill > and inserting 3 < resubmit > 4 27. Page 9, by striking lines 13 through 15 and inserting: 5 < (3) Make the adjustment pursuant to subparagraph (1) 6 applicable to all of the following: 7 (a) Each pharmacy that is under common ownership with the 8 pharmacy that submitted the appeal. 9 (b) Each pharmacy in the state that demonstrates the 10 inability to purchase the prescription drug for less than the 11 established maximum allowable cost or reimbursement rate. > 12 28. Page 9, line 22, after < cost > by inserting < or 13 reimbursement rate > 14 29. Page 9, line 26, by striking < acquisition > and inserting 15 < invoice > 16 30. Page 9, line 29, by striking < list > and inserting < or 17 the reimbursement rate > 18 31. Page 9, line 30, by striking < acquisition > and inserting 19 < invoice > 20 32. Page 9, line 30, by striking < rebill > and inserting 21 < resubmit > 22 33. Page 9, line 33, after < cost > by inserting < or the 23 reimbursement rate > 24 34. Page 10, line 12, by striking < shall > and inserting 25 < may > 26 35. Page 10, by striking lines 22 through 27 and inserting: 27 < 3. A pharmacy benefits manager shall be subject to the 28 commissioner’s authority to conduct an examination pursuant to 29 chapter 507. > 30 36. Page 11, line 19, by striking < shall > and inserting 31 < may > 32 37. Page 11, line 29, before < This > by inserting < 1. > 33 38. Page 11, line 29, after < This > by inserting < division 34 of this Act > 35 -3- HF 2384.3888 (1) 89 ko/rn 3/ 8 #25. #26. #27. #28. #29. #30. #31. #32. #33. #34. #35. #36. #37.

39. Page 11, after line 32 by inserting: 1 < 2. The following applies to all health benefit plans 2 delivered, issued for delivery, continued, or renewed in this 3 state on or after January 1, 2023: 4 The section of this division of this Act amending section 5 510B.8, subsection 7. > 6 40. Page 11, before line 33 by inserting: 7 < DIVISION ___ 8 PHARMACIES AND COVERED ENTITIES —— 340B DRUG PROGRAM 9 Sec. ___. NEW SECTION . 510D.1 Definitions. 10 As used in this chapter, unless the context otherwise 11 requires: 12 1. “340B program” means the program created pursuant to the 13 Veterans Health Care Act of 1992, Pub. L. No. 102-585, section 14 602, and codified as section 340B of the federal Public Health 15 Services Act. 16 2. “Contract pharmacy” means a pharmacy that has executed a 17 contract with a covered entity to dispense covered outpatient 18 drugs, purchased by the covered entity through the 340B 19 program, to eligible patients of the covered entity. 20 3. “Covered entity” means the same as defined in 42 U.S.C. 21 §256b(a)(4). 22 4. “Group health plan” means the same as defined in section 23 513B.2. 24 5. “Medicaid managed care organization” means an entity that 25 is under contract with the Iowa department of human services 26 to provide services to Medicaid recipients and that also meets 27 the definition of “health maintenance organization” in section 28 514B.1. 29 6. “Pharmacy benefits manager” means the same as defined in 30 section 510B.1. 31 7. “Similarly situated entity or pharmacy” means an entity 32 or pharmacy that is of a generally comparable size, and that 33 operates in a market with similar demographic characteristics, 34 including population size, density, distribution, and vital 35 -4- HF 2384.3888 (1) 89 ko/rn 4/ 8 #39. #40.

statistics, and reasonably similar economic and geographic 1 conditions. 2 8. “Third-party administrator” means the same as defined in 3 section 510.11. 4 Sec. ___. NEW SECTION . 510D.2 340B drug program —— contract 5 pharmacies and covered entities. 6 1. Group health plans, health insurance issuers that offer 7 group or individual health insurance coverage, third-party 8 administrators, and pharmacy benefits managers shall not 9 discriminate against a covered entity or a contract pharmacy 10 by reimbursing the covered entity or the contract pharmacy 11 for a prescription drug or for a dispensing fee in an amount 12 less than the group health plan, health insurance issuer, 13 third-party administrator, or pharmacy benefits manager 14 reimburses a similarly situated entity or pharmacy that is not 15 a covered entity or a contract pharmacy. 16 2. a. Group health plans, health insurance issuers that 17 offer group or individual health insurance coverage, third- 18 party administrators, and pharmacy benefits managers shall not, 19 solely on the basis that an entity is a covered entity or that 20 a pharmacy is a contract pharmacy, or that a covered entity 21 or contract pharmacy participates in the 340B program, impose 22 any of the following contractual terms and conditions on the 23 covered entity or the contract pharmacy that differ from those 24 imposed on a similarly situated entity or pharmacy that is not 25 a covered entity or a contract pharmacy: 26 (1) Fees, chargebacks, clawbacks, adjustments, or other 27 assessments that are not required by state law or the Iowa 28 administrative code. 29 (2) Professional dispensing fees that are not required by 30 state law or the Iowa administrative code. 31 (3) Restrictions or requirements related to participation 32 in standard or preferred pharmacy networks. 33 (4) Requirements related to the frequency or scope of 34 audits. 35 -5- HF 2384.3888 (1) 89 ko/rn 5/ 8

(5) Requirements related to inventory management systems 1 that utilize generally accepted accounting principles. 2 (6) Requirements related to mandatory disclosure either 3 directly or through a third party, except disclosures required 4 by federal law, of prescription orders that are filled with 5 covered outpatient drugs obtained through the 340B program. 6 b. Paragraph “a” , subparagraph (1), shall not be construed 7 to prohibit adjustments for overpayments or other errors 8 associated with an adjudicated claim. 9 c. Paragraph “a” , subparagraph (6), shall not be construed 10 to prohibit modifiers or identifiers to prevent duplication of 11 rebates. 12 3. Group health plans, health insurance issuers that offer 13 group or individual health insurance coverage, third-party 14 administrators, and pharmacy benefits managers shall not do any 15 of the following: 16 a. Place any restrictions or impose any requirements on 17 an individual that chooses to obtain a covered outpatient 18 drug from a covered entity or a contract pharmacy, whether in 19 person, via courier or the United States post office, or any 20 other form of delivery. 21 b. Refuse to contract with a covered entity or a contract 22 pharmacy based on any criteria that is not applied equally to 23 contract with a similarly situated entity or pharmacy that does 24 not participate in the 340B drug program. 25 c. Impose any restriction or condition, as identified by 26 the commissioner by rule, on a covered entity that interferes 27 with the covered entity’s ability to maximize the value of the 28 discounts obtained by the covered entity through the covered 29 entity’s participation in the 340B drug program. 30 Sec. ___. NEW SECTION . 510D.3 Penalties. 31 The commissioner of insurance shall impose a civil penalty, 32 not to exceed five thousand dollars per violation per day, on 33 any entity that violates this chapter. 34 Sec. ___. NEW SECTION . 510D.4 Rules. 35 -6- HF 2384.3888 (1) 89 ko/rn 6/ 8

The commissioner of insurance may adopt rules as necessary 1 to implement the chapter. 2 Sec. ___. NEW SECTION . 510D.5 Applicability. 3 1. This chapter shall apply to covered entities, contract 4 pharmacies, group health plans, health insurance issuers 5 that offer group or individual health insurance coverage, 6 third-party administrators, and pharmacy benefits managers, 7 regardless of whether the covered entity or contract pharmacy 8 is eligible to retain the discounts generated by the covered 9 entity’s or contract pharmacy’s participation in the 340B 10 program. 11 2. This chapter shall not apply to any of the following: 12 a. Covered entities, contract pharmacies, group health 13 plans, health insurance issuers that offer group or individual 14 health insurance coverage, third-party administrators, and 15 pharmacy benefits managers when acting pursuant to a contract 16 with any of the following: 17 (1) A Medicaid managed care organization. 18 (2) The Iowa department of human services to provide 19 services to medical assistance program recipients pursuant to 20 chapter 249A. 21 b. The medical assistance program under chapter 249A. 22 Sec. ___. NEW SECTION . 510D.6 Inconsistencies and 23 conflicts. 24 1. To the extent that any provision of this chapter is 25 inconsistent or conflicts with an applicable federal law, rule, 26 or regulation, such federal law, rule, or regulation shall 27 prevail to the extent necessary to eliminate the inconsistency 28 or conflict. 29 2. To the extent that any provision of this chapter is 30 inconsistent or conflicts with the state’s medical assistance 31 state plan, the state’s medical assistance state plan shall 32 prevail to the extent necessary to eliminate the inconsistency 33 or conflict. > 34 41. Title page, line 1, after < pharmacies, > by striking 35 -7- HF 2384.3888 (1) 89 ko/rn 7/ 8