House File 2384 S-5159 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 2384.4520 (3) 89 ko/rn 1/ 8 #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 2384.4520 (3) 89 ko/rn 2/ 8 #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 3, line 35, by striking < health carrier > and 12 inserting < third-party payor > 13 11. Page 4, line 4, by striking < health carrier > and 14 inserting < third-party payor > 15 12. Page 4, line 6, by striking < health carrier > and 16 inserting < third-party payor > 17 13. Page 4, line 8, before < A > by inserting < A health 18 carrier, or a pharmacy benefits manager providing pharmacy 19 benefits management services on behalf of a health carrier 20 pursuant to a contract or other arrangement for compensation, 21 shall not discriminate against a pharmacy or pharmacist with 22 respect to participation. > 23 14. Page 4, line 8, by striking < or > 24 15. Page 4, line 9, by striking < plan > and inserting < plan, 25 or third-party payor > 26 16. Page 4, line 10, by striking < participation, > 27 17. Page 4, line 18, by striking < health carrier > and 28 inserting < third-party payor > 29 18. Page 4, lines 20 and 21, by striking < health carrier > 30 and inserting < third-party payor > 31 19. Page 4, line 35, by striking < health > and inserting 32 < third-party payor > 33 20. Page 5, line 1, by striking < carrier > 34 21. Page 5, by striking line 14 and inserting: 35 -3- HF 2384.4520 (3) 89 ko/rn 3/ 8 #9. #10. #11. #12. #13. #14. #15. #16. #17. #18. #19. #20. #21.

< ___. A pharmacy benefits manager providing pharmacy 1 benefits management services on behalf of a health carrier 2 pursuant to a contract or other arrangement for compensation 3 shall not prohibit a pharmacy located in the state > 4 22. Page 6, by striking lines 5 through 9 and inserting: 5 < ___. A pharmacy benefits manager providing pharmacy 6 benefits management services on behalf of a health carrier 7 pursuant to a contract or other arrangement for compensation 8 shall not prohibit a covered person from filling a prescription 9 drug order at any pharmacy located in the state provided that 10 the pharmacy accepts the same terms and conditions as the 11 pharmacies participating in the pharmacy benefits manager’s 12 pharmacy network for the health carrier of the covered person. > 13 23. Page 7, by striking lines 3 through 18 and inserting: 14 < c. (1) Paragraph “a” shall not apply to cost-sharing 15 paid by a covered person, or to cost-sharing paid by any other 16 person on behalf of the covered person, for a specialty drug 17 for which a medically appropriate A-rated generic equivalent is 18 available to the covered person. 19 (2) Notwithstanding subparagraph (1), paragraph “a” 20 shall apply to cost-sharing paid by a covered person, or to 21 cost-sharing paid by any other person on behalf of the covered 22 person, for a specialty drug for which a medically appropriate 23 A-rated generic equivalent is available to the covered person 24 in the following circumstances: 25 (a) The prescribing health care professional has determined 26 that the prescribed specialty drug is medically necessary. 27 (b) The covered person obtained access to the prescribed 28 specialty drug via a prior authorization, a step therapy 29 protocol, or the covered person’s health carrier’s exception 30 and appeal process. > 31 24. Page 12, line 16, before < Act > by inserting < division 32 of this > 33 25. Page 12, line 17, by striking < health carrier’s > 34 26. Page 12, line 23, before < Act > by inserting < division 35 -4- HF 2384.4520 (3) 89 ko/rn 4/ 8 #22. #23. #24. #25.

of this > 1 27. Page 12, after line 24 by inserting: 2 < DIVISION ___ 3 PHARMACY BENEFITS MANAGER REPORTING 4 Sec. ___. Section 510C.1, Code 2022, is amended to read as 5 follows: 6 510C.1 Definitions. 7 As used in this chapter unless the context otherwise 8 requires: 9 1. “Administrative fees” means a fee or payment, other than 10 a rebate, under a contract between a pharmacy benefits manager 11 and a pharmaceutical drug manufacturer in connection with the 12 pharmacy benefits manager’s management of a health carrier’s 13 third-party payor’s prescription drug benefit, that is paid 14 by a pharmaceutical drug manufacturer to a pharmacy benefits 15 manager or is retained by the pharmacy benefits manager. 16 2. “Aggregate retained rebate percentage” means the 17 percentage of all rebates received by a pharmacy benefits 18 manager that is not passed on to the pharmacy benefits 19 manager’s health carrier third-party payor clients. 20 3. “Commissioner” means the commissioner of insurance. 21 4. “Covered person” means the same as defined in section 22 514J.102 510B.1 . 23 5. “Formulary” means a complete list of prescription drugs 24 eligible for coverage under a health benefit plan. 25 6. “Health benefit plan” means the same as defined in 26 section 514J.102 510B.1 . 27 7. “Health carrier” means the same as defined in section 28 514J.102 510B.1 . 29 8. “Health carrier administrative service fee” means a fee or 30 payment under a contract between a pharmacy benefits manager 31 and a health carrier in connection with the pharmacy benefits 32 manager’s administration of the health carrier’s prescription 33 drug benefit that is paid by a health carrier to a pharmacy 34 benefits manager or is otherwise retained by a pharmacy 35 -5- HF 2384.4520 (3) 89 ko/rn 5/ 8 #27.

benefits manager. 1 9. 8. “Pharmacy benefits manager” means a person who, 2 pursuant to a contract or other relationship with a health 3 carrier, either directly or through an intermediary, manages a 4 prescription drug benefit provided by the health carrier the 5 same as defined in section 510B.1 . 6 10. 9. “Prescription drug benefit” means a health benefit 7 plan providing for third-party payment or prepayment for 8 prescription drugs the same as defined in section 510B.1 . 9 11. 10. “Rebate” means all discounts and other 10 negotiated price concessions paid directly or indirectly by 11 a pharmaceutical manufacturer or other entity, other than a 12 covered person, in the prescription drug supply chain to a 13 pharmacy benefits manager, and which may be based on any of the 14 following: the same as defined in section 510B.1. 15 a. A pharmaceutical manufacturer’s list price for a 16 prescription drug. 17 b. Utilization. 18 c. To maintain a net price for a prescription drug for a 19 specified period of time for the pharmacy benefits manager 20 in the event the pharmaceutical manufacturer’s list price 21 increases. 22 d. Reasonable estimates of the volume of a prescribed drug 23 that will be dispensed by a pharmacy to covered persons. 24 11. “Third-party payor” means the same as defined in section 25 510B.1. 26 12. “Third-party payor administrative service fee” means a 27 fee or payment under a contract between a pharmacy benefits 28 manager and a third-party payor in connection with the pharmacy 29 benefits manager’s administration of the third-party payor’s 30 prescription drug benefit that is paid by a third-party payor 31 to a pharmacy benefits manager or is otherwise retained by a 32 pharmacy benefits manager. 33 Sec. ___. Section 510C.2, subsection 1, unnumbered 34 paragraph 1, Code 2022, is amended to read as follows: 35 -6- HF 2384.4520 (3) 89 ko/rn 6/ 8

Each pharmacy benefits manager shall provide a report 1 annually by February 15 to the commissioner that contains 2 all of the following information regarding prescription drug 3 benefits provided to covered persons of each health carrier 4 third-party payor with whom the pharmacy benefits manager has 5 contracted during the prior calendar year: 6 Sec. ___. Section 510C.2, subsection 1, paragraphs c, d, e, 7 and g, Code 2022, are amended to read as follows: 8 c. The aggregate dollar amount of all health carrier 9 third-party payor administrative service fees received by the 10 pharmacy benefits manager. 11 d. The aggregate dollar amount of all rebates received 12 by the pharmacy benefits manager that the pharmacy benefits 13 manager did not pass through to the health carrier third-party 14 payor . 15 e. The aggregate amount of all administrative fees received 16 by the pharmacy benefits manager that the pharmacy benefits 17 manager did not pass through to the health carrier third-party 18 payor . 19 g. Across all health carrier third-party payor clients with 20 whom the pharmacy benefits manager was contracted, the highest 21 and the lowest aggregate retained rebate percentages. 22 Sec. ___. Section 510C.2, subsection 2, paragraph a, 23 subparagraph (1), Code 2022, is amended to read as follows: 24 (1) The identity of a specific health carrier third-party 25 payor . 26 Sec. ___. Section 510C.2, subsection 2, paragraph b, Code 27 2022, is amended to read as follows: 28 b. Information provided under this section by a pharmacy 29 benefits manager to the commissioner that may reveal the 30 identity of a specific health carrier third-party payor , the 31 price charged by a specific pharmaceutical manufacturer for 32 a specific prescription drug or class of prescription drugs, 33 or the amount of rebates provided for a specific prescription 34 drug or class of prescription drugs shall be considered a 35 -7- HF 2384.4520 (3) 89 ko/rn 7/ 8