Senate Amendment to House File 2384 H-8401 Amend House File 2384, as amended, passed, and reprinted by 1 the House, as follows: 2 1. Page 1, by striking lines 1 through 4 and inserting: 3 < DIVISION I 4 PHARMACY BENEFITS MANAGERS, PHARMACIES, AND PRESCRIPTION DRUG 5 BENEFITS > 6 2. Page 1, after line 26 by inserting: 7 < ___. “Facility” means an institution providing health 8 care services or a health care setting, including but not 9 limited to hospitals and other licensed inpatient centers, 10 ambulatory surgical or treatment centers, skilled nursing 11 centers, residential treatment centers, diagnostic, laboratory 12 and imaging centers, and rehabilitation and other therapeutic 13 health settings. > 14 3. Page 1, by striking lines 27 through 30 and inserting: 15 < ___. “Health benefit plan” means a policy, contract, 16 certificate, or agreement offered or issued by a third-party 17 payor to provide, deliver, arrange for, pay for, or reimburse 18 any of the costs of health care services. 19 ___. “Health care professional” means a physician or other 20 health care practitioner licensed, accredited, registered, or 21 certified to perform specified health care services consistent 22 with state law. 23 ___. “Health care provider” means a health care professional 24 or a facility. > 25 4. Page 2, by striking lines 1 through 9 and inserting 26 < corporation, or a plan established pursuant to chapter 509A 27 for public employees. “Health carrier” does not include any of 28 the following: > 29 5. Page 2, before line 10 by inserting: 30 < a. The department of human services. 31 b. A managed care organization acting pursuant to a contract 32 with the department of human services to administer the medical 33 assistance program under chapter 249A or the healthy and well 34 kids in Iowa (hawk-i) program under chapter 514I. 35 -1- HF 2384.4648.S (1) 89 mb 1/ 7 #1. #2. #3. #4. #5.

c. A policy or contract providing a prescription drug 1 benefit pursuant to 42 U.S.C. ch. 7, subch. XVIII, part D. 2 d. A plan offered or maintained by a multiple employer 3 welfare arrangement established under chapter 513D before 4 January 1, 2022. > 5 6. Page 3, by striking lines 4 and 5 and inserting: 6 < ___. “Pharmacy benefits manager” means a person who, 7 pursuant to a contract or other relationship with a third-party 8 payor, either directly or through an intermediary, manages a 9 prescription drug benefit provided by the third-party payor. > 10 7. Page 3, by striking lines 18 and 19 and inserting: 11 < ___. “Prescription drug benefit” means a health benefit 12 plan providing for third-party payment or prepayment for 13 prescription drugs. > 14 8. Page 3, by striking line 22 and inserting: 15 < ___. “Rebate” means all discounts and other negotiated 16 price concessions paid directly or indirectly by a 17 pharmaceutical manufacturer or other entity, other than a 18 covered person, in the prescription drug supply chain to a 19 pharmacy benefits manager, and which may be based on any of the 20 following: 21 a. A pharmaceutical manufacturer’s list price for a 22 prescription drug. 23 b. Utilization. 24 c. To maintain a net price for a prescription drug for a 25 specified period of time for the pharmacy benefits manager 26 in the event the pharmaceutical manufacturer’s list price 27 increases. 28 d. Reasonable estimates of the volume of a prescribed drug 29 that will be dispensed by a pharmacy to covered persons. 30 ___. “Third-party payor” means any entity other than a 31 covered person or a health care provider that is responsible 32 for any amount of reimbursement for a prescription drug 33 benefit. “Third-party payor” includes health carriers and other 34 entities that provide a plan of health insurance or health 35 -2- HF 2384.4648.S (1) 89 mb 2/ 7 #6. #7. #8.

care benefits. “Third-party payor” does not include any of the 1 following: 2 a. The department of human services. 3 b. A managed care organization acting pursuant to a contract 4 with the department of human services to administer the medical 5 assistance program under chapter 249A or the healthy and well 6 kids in Iowa (hawk-i) program under chapter 514I. 7 c. A policy or contract providing a prescription drug 8 benefit pursuant to 42 U.S.C. ch. 7, subch. XVIII, part D. > 9 9. Page 3, line 33, by striking < health carrier > and 10 inserting < third-party payor > 11 10. Page 4, line 4, by striking < health carrier > and 12 inserting < third-party payor > 13 11. Page 4, line 6, by striking < health carrier > and 14 inserting < third-party payor > 15 12. Page 4, by striking lines 8 through 13. 16 13. Page 5, by striking lines 14 through 17. 17 14. By striking page 6, line 1, through page 7, line 18. 18 15. By striking page 9, line 2, through page 10, line 23. 19 16. Page 12, line 16, before < Act > by inserting < division 20 of this > 21 17. Page 12, line 17, by striking < health carrier’s > 22 18. Page 12, by striking lines 20 through 24 and inserting: 23 < DIVISION ___ 24 PHARMACY BENEFITS MANAGER REPORTING 25 Sec. ___. Section 510C.1, Code 2022, is amended to read as 26 follows: 27 510C.1 Definitions. 28 As used in this chapter unless the context otherwise 29 requires: 30 1. “Administrative fees” means a fee or payment, other than 31 a rebate, under a contract between a pharmacy benefits manager 32 and a pharmaceutical drug manufacturer in connection with the 33 pharmacy benefits manager’s management of a health carrier’s 34 third-party payor’s prescription drug benefit, that is paid 35 -3- HF 2384.4648.S (1) 89 mb 3/ 7 #9. #10. #11. #12. #13. #14. #15. #16. #17. #18.

by a pharmaceutical drug manufacturer to a pharmacy benefits 1 manager or is retained by the pharmacy benefits manager. 2 2. “Aggregate retained rebate percentage” means the 3 percentage of all rebates received by a pharmacy benefits 4 manager that is not passed on to the pharmacy benefits 5 manager’s health carrier third-party payor clients. 6 3. “Commissioner” means the commissioner of insurance. 7 4. “Covered person” means the same as defined in section 8 514J.102 510B.1 . 9 5. “Formulary” means a complete list of prescription drugs 10 eligible for coverage under a health benefit plan. 11 6. “Health benefit plan” means the same as defined in 12 section 514J.102 510B.1 . 13 7. “Health carrier” means the same as defined in section 14 514J.102 510B.1 . 15 8. “Health carrier administrative service fee” means a fee or 16 payment under a contract between a pharmacy benefits manager 17 and a health carrier in connection with the pharmacy benefits 18 manager’s administration of the health carrier’s prescription 19 drug benefit that is paid by a health carrier to a pharmacy 20 benefits manager or is otherwise retained by a pharmacy 21 benefits manager. 22 9. 8. “Pharmacy benefits manager” means a person who, 23 pursuant to a contract or other relationship with a health 24 carrier, either directly or through an intermediary, manages a 25 prescription drug benefit provided by the health carrier the 26 same as defined in section 510B.1 . 27 10. 9. “Prescription drug benefit” means a health benefit 28 plan providing for third-party payment or prepayment for 29 prescription drugs the same as defined in section 510B.1 . 30 11. 10. “Rebate” means all discounts and other 31 negotiated price concessions paid directly or indirectly by 32 a pharmaceutical manufacturer or other entity, other than a 33 covered person, in the prescription drug supply chain to a 34 pharmacy benefits manager, and which may be based on any of the 35 -4- HF 2384.4648.S (1) 89 mb 4/ 7

following: the same as defined in section 510B.1. 1 a. A pharmaceutical manufacturer’s list price for a 2 prescription drug. 3 b. Utilization. 4 c. To maintain a net price for a prescription drug for a 5 specified period of time for the pharmacy benefits manager 6 in the event the pharmaceutical manufacturer’s list price 7 increases. 8 d. Reasonable estimates of the volume of a prescribed drug 9 that will be dispensed by a pharmacy to covered persons. 10 11. “Third-party payor” means the same as defined in section 11 510B.1. 12 12. “Third-party payor administrative service fee” means a 13 fee or payment under a contract between a pharmacy benefits 14 manager and a third-party payor in connection with the pharmacy 15 benefits manager’s administration of the third-party payor’s 16 prescription drug benefit that is paid by a third-party payor 17 to a pharmacy benefits manager or is otherwise retained by a 18 pharmacy benefits manager. 19 Sec. ___. Section 510C.2, subsection 1, unnumbered 20 paragraph 1, Code 2022, is amended to read as follows: 21 Each pharmacy benefits manager shall provide a report 22 annually by February 15 to the commissioner that contains 23 all of the following information regarding prescription drug 24 benefits provided to covered persons of each health carrier 25 third-party payor with whom the pharmacy benefits manager has 26 contracted during the prior calendar year: 27 Sec. ___. Section 510C.2, subsection 1, paragraphs c, d, e, 28 and g, Code 2022, are amended to read as follows: 29 c. The aggregate dollar amount of all health carrier 30 third-party payor administrative service fees received by the 31 pharmacy benefits manager. 32 d. The aggregate dollar amount of all rebates received 33 by the pharmacy benefits manager that the pharmacy benefits 34 manager did not pass through to the health carrier third-party 35 -5- HF 2384.4648.S (1) 89 mb 5/ 7

payor . 1 e. The aggregate amount of all administrative fees received 2 by the pharmacy benefits manager that the pharmacy benefits 3 manager did not pass through to the health carrier third-party 4 payor . 5 g. Across all health carrier third-party payor clients with 6 whom the pharmacy benefits manager was contracted, the highest 7 and the lowest aggregate retained rebate percentages. 8 Sec. ___. Section 510C.2, subsection 2, paragraph a, 9 subparagraph (1), Code 2022, is amended to read as follows: 10 (1) The identity of a specific health carrier third-party 11 payor . 12 Sec. ___. Section 510C.2, subsection 2, paragraph b, Code 13 2022, is amended to read as follows: 14 b. Information provided under this section by a pharmacy 15 benefits manager to the commissioner that may reveal the 16 identity of a specific health carrier third-party payor , the 17 price charged by a specific pharmaceutical manufacturer for 18 a specific prescription drug or class of prescription drugs, 19 or the amount of rebates provided for a specific prescription 20 drug or class of prescription drugs shall be considered a 21 confidential record and be recognized and protected as a trade 22 secret pursuant to section 22.7, subsection 3 . 23 DIVISION ___ 24 EMERGENCY RULEMAKING 25 Sec. ___. EMERGENCY RULES. The insurance division of the 26 department of commerce may adopt emergency rules under section 27 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph 28 “b”, to implement the provisions of this Act and the rules 29 shall be effective immediately upon filing unless a later date 30 is specified in the rules. Any rules adopted in accordance 31 with this section shall also be published as a notice of 32 intended action as provided in section 17A.4. 33 DIVISION ___ 34 EFFECTIVE DATE 35 -6- HF 2384.4648.S (1) 89 mb 6/ 7