House
File
2401
H-8190
Amend
the
amendment,
H-8179,
to
House
File
2401,
as
follows:
1
1.
Page
2,
after
line
17
by
inserting:
2
<
___.
Page
4,
after
line
14
by
inserting:
3
<
DIVISION
___
4
PHARMACY
BENEFITS
MANAGER
REVERSE
AUCTIONS
5
Sec.
___.
NEW
SECTION
.
8A.319
Pharmacy
benefits
manager
6
reverse
auctions.
7
1.
This
section
may
be
cited
as
“The
Iowa
Competitive
8
Pharmacy
Benefits
Managers
Marketplace
Act”
.
9
2.
As
used
in
this
section,
unless
the
context
otherwise
10
requires:
11
a.
“Market
check”
means
a
technology-driven
evaluation
of
an
12
incumbent
pharmacy
benefits
manager’s
prescription
drug
pricing
13
based
on
benchmark
comparators
derived
from
pharmacy
benefits
14
manager
reverse
auction
processes
conducted
in
the
United
15
States
over
the
immediately
preceding
twelve
months.
16
b.
“Participant
bidding
agreement”
means
an
online
17
agreement
that
details
common
definitions,
prescription
drug
18
classifications,
rules,
data
access
and
use
rights,
and
other
19
optimal
contract
terms
that
benefit
the
state
and
that
all
20
bidders
must
accept
as
a
prerequisite
for
participation
in
a
21
pharmacy
benefits
manager
reverse
auction.
22
c.
“Pharmacy
benefits
manager”
means
the
same
as
defined
in
23
section
510B.1.
24
d.
“Pharmacy
benefits
manager
reverse
auction”
means
an
25
automated,
transparent,
and
competitive
bidding
process
26
conducted
online
that
starts
with
an
opening
round
of
bids
27
and
allows
qualified
pharmacy
benefits
manager
bidders
to
28
counteroffer
a
lower
price
for
as
many
rounds
of
bidding
29
as
determined
by
the
department
for
a
multiple
health
plan
30
prescription
drug
purchasing
group.
31
e.
“Price”
means
the
projected
cost
of
a
pharmacy
benefits
32
manager’s
bid
to
provide
prescription
drug
benefits
to
allow
33
direct
comparison
of
the
comparably
calculated
costs
of
34
competing
pharmacy
benefits
managers’
proposals
over
the
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#1.
duration
of
the
pharmacy
benefits
manager’s
services
contract.
1
f.
“Real-time”
means
within
no
more
than
one
hour.
2
g.
“Self-funded
private
sector
health
plan”
means
any
3
self-funded
private
sector
employer
or
multi-employer
health
4
plan.
5
h.
“Self-funded
public
sector
health
plan”
means
any
group
6
benefit
plan
under
chapter
509A.
7
3.
Consistent
with
section
8A.311,
and
notwithstanding
any
8
other
law
to
the
contrary,
the
department
shall
enter
into
a
9
contract
for
the
services
of
a
pharmacy
benefits
manager
for
10
the
administration
of
benefits
of
self-funded
public
sector
11
health
plans
in
compliance
with
this
section.
12
4.
Prior
to
November
1,
2024,
the
department
shall
13
procure,
through
solicitation
of
proposals
from
qualified
14
professional
services
vendors,
all
of
the
following
based
on
15
price,
capabilities,
and
other
factors
deemed
relevant
by
the
16
department:
17
a.
A
technology
platform
with
the
capabilities
to
conduct
18
a
pharmacy
benefits
manager
reverse
auction.
The
department
19
shall
ensure
that
the
technology
platform
possesses,
at
a
20
minimum,
the
capacity
to
do
all
of
the
following:
21
(1)
Conduct
an
automated,
online,
reverse
auction
of
22
pharmacy
benefits
manager
services
using
a
software
application
23
and
high-performance
data
infrastructure
to
intake,
cleanse,
24
and
normalize
pharmacy
benefits
manager
data
with
development
25
methods
and
information
security
standards
that
have
been
26
validated
by
receiving
service
organization
control
2
and
27
national
institute
of
standards
and
technology
certification,
28
or
successor
information
technology
security
certifications,
as
29
identified
by
the
office
of
the
chief
information
officer.
30
(2)
Automate
repricing
of
diverse
and
complex
pharmacy
31
benefits
managers’
prescription
drug
pricing
proposals
to
allow
32
direct
comparison
by
the
state
of
the
comparably
calculated
33
costs
of
pharmacy
benefits
managers’
bids
using
one
hundred
34
percent
of
annual
prescription
drug
claims
data
available
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for
state-funded
health
plans,
or
a
multiple
health
plan
1
prescription
drug
purchasing
group,
and
using
code-based
2
classification
of
drugs
from
nationally
accepted
drug
sources.
3
(3)
Simultaneously
evaluate
in
real-time
diverse
and
4
complex
multiple
proposals
from
full-service
pharmacy
benefits
5
managers,
including
average
wholesale
price,
guaranteed
6
net
cost,
and
national
average
drug
acquisition
cost
7
pricing
models,
as
well
as
proposals
from
pharmacy
benefits
8
administrators
and
specialty
drug
and
rebate
carve-out
service
9
providers.
10
(4)
Produce
an
automated
report
and
analysis
of
pharmacy
11
benefits
managers’
bids,
including
ranking
of
pharmacy
benefits
12
managers’
bids
based
on
comparative
costs
and
qualitative
13
aspects
of
the
bids
in
real-time
following
the
close
of
each
14
round
of
reverse
auction
bidding.
15
(5)
Perform
real-time,
electronic,
line-by-line,
16
claim-by-claim
review
of
one
hundred
percent
of
invoiced
17
pharmacy
benefits
managers’
prescription
drug
claims,
and
18
identify
all
deviations
from
the
specific
terms
of
the
pharmacy
19
benefits
manager’s
services
contract
that
resulted
from
the
20
reserve
auction
process.
21
b.
Related
services
from
the
operator
of
the
technology
22
platform
identified
in
paragraph
“a”
,
which
at
a
minimum
shall
23
include
all
of
the
following:
24
(1)
Evaluation
of
the
qualifications
of
pharmacy
benefits
25
manager
bidders.
26
(2)
Pharmacy
benefits
manager
reverse
auction
services
to
27
support
the
department
in
comparing
pricing
for
the
pharmacy
28
benefits
manager
procurement.
29
(3)
Related
professional
services.
30
5.
The
department
shall
not
award
a
contract
for
the
31
technology
platform
and
technology
operator
services
to
a
32
vendor
that
is
a
pharmacy
benefits
manager
or
to
a
vendor
that
33
is
managed
by,
or
a
subsidiary
or
affiliate
of,
a
pharmacy
34
benefits
manager.
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6.
The
vendor
awarded
the
contract
by
the
department
shall
1
not
outsource
any
part
of
the
pharmacy
benefits
manager
reverse
2
auction
or
any
part
of
the
automated,
real-time,
electronic,
3
line-by-line,
claim-by-claim
review
of
invoiced
pharmacy
4
benefits
manager
prescription
drug
claims.
5
7.
With
technical
assistance
and
support
provided
by
the
6
technology
platform
operator,
the
department
shall
specify
the
7
terms
of
the
participant
bidding
agreement.
The
terms
of
the
8
participant
bidding
agreement
shall
not
be
modified
except
by
9
specific
consent
of
the
department.
10
8.
a.
The
technology
platform
used
to
conduct
the
reverse
11
auction
shall
be
repurposed
over
the
duration
of
the
pharmacy
12
benefits
manager’s
services
contract
as
an
automated
pharmacy
13
claims
adjudication
engine
to
perform
real-time,
electronic,
14
line-by-line,
claim-by-claim
review
of
one
hundred
percent
of
15
invoiced
pharmacy
benefits
manager’s
prescription
drug
claims,
16
and
to
identify
all
deviations
from
the
specific
terms
of
the
17
pharmacy
benefits
manager’s
services
contract.
18
b.
The
department
shall
reconcile
the
electronically
19
adjudicated
pharmacy
claims,
as
described
in
paragraph
“a”
,
20
with
pharmacy
benefits
manager’s
invoices
on
a
monthly
or
21
quarterly
basis
to
ensure
that
state
payments
shall
not
exceed
22
the
terms
specified
in
any
pharmacy
benefits
manager’s
services
23
contract.
24
c.
If
following
state
payment
to
the
pharmacy
benefits
25
manager
on
the
basis
of
the
reconciliation
under
paragraph
26
“b”
the
pharmacy
benefits
manager
asserts
that
the
department
27
paid
less
than
the
amount
owed,
the
pharmacy
benefits
manager
28
may
seek
resolution
through
a
mutually
acceptable
dispute
29
resolution
process
that
the
parties
agreed
to
in
the
terms
of
30
the
services
contract
under
subsection
9,
paragraph
“a”
.
31
9.
a.
The
first
pharmacy
benefits
manager
reverse
auction
32
shall
be
completed
and
the
services
contract
shall
be
awarded
33
to
the
winning
pharmacy
benefits
manager
with
an
effective
date
34
beginning
July
1,
2025.
Subsequent
contracts
must
be
awarded
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no
later
than
three
months
prior
to
termination
or
expiration
1
of
the
current
pharmacy
benefits
manager’s
services
contract
2
for
a
covered
group,
such
as
the
state
employees
benefits
3
group,
that
includes
only
active
employees
and
dependents,
but
4
does
not
include
retiree
participants
in
a
Medicare
part
D
5
employer
group
waiver
program
pursuant
to
the
federal
Medicare
6
Prescription
Drug,
Improvement,
and
Modernization
Act
of
2003,
7
Pub.
L.
No.
108-173.
8
b.
In
the
event
an
eligible
covered
group
that
includes
9
retiree
participants
in
a
Medicare
part
D
employer
group
10
waiver
program
pursuant
to
the
federal
Medicare
Prescription
11
Drug,
Improvement,
and
Modernization
Act
of
2003,
Pub.
L.
No.
12
108-173,
opts
to
use
the
processes
and
procedures
under
this
13
section,
the
relevant
pharmacy
benefits
manager
reverse
auction
14
shall
be
completed
and
the
pharmacy
benefits
manager
services
15
contract
shall
be
awarded
to
the
winning
pharmacy
benefits
16
manager
no
later
than
six
months
prior
to
termination
or
17
expiration
of
the
pharmacy
benefits
manager’s
services
contract
18
currently
covering
the
retiree
employer
group
waiver
program
19
participants.
20
10.
The
department
may
perform
a
market
check
for
providing
21
pharmacy
benefits
manager
services
during
the
term
of
the
22
current
pharmacy
benefits
manager’s
services
contract
in
order
23
to
ensure
continuing
competitiveness
of
incumbent
prescription
24
drug
pricing
during
the
term
of
a
pharmacy
benefits
manager’s
25
services
contract.
26
11.
To
ensure
that
the
department
does
not
incur
additional
27
expenditures
associated
with
the
pharmacy
benefits
manager
28
reverse
auction,
ongoing
electronic
review
and
validation
29
of
pharmacy
benefits
managers’
claims,
and
periodic
market
30
checks,
the
department
shall
implement
a
no-pay
option
that
31
obligates
the
winning
pharmacy
benefits
manager,
rather
than
32
the
state,
to
pay
the
cost
of
the
technology
platform
and
33
related
technology
platform
operator
services
by
assessing
the
34
pharmacy
benefits
manager
a
per-prescription
fee
in
an
amount
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agreed
to
by
the
department
and
the
technology
operator,
and
1
requiring
the
pharmacy
benefits
manager
to
pay
the
fees
to
the
2
technology
operator
over
the
duration
of
the
pharmacy
benefits
3
manager’s
services
contract.
The
obligation
of
the
winning
4
pharmacy
benefits
manager
to
pay
the
per-prescription
fee
shall
5
be
incorporated
as
a
term
of
the
participant
bidding
agreement
6
and
the
pharmacy
benefits
manager’s
services
contract
awarded
7
to
the
pharmacy
benefits
manager
reverse
auction
winner.
8
12.
a.
This
section
shall
apply
to
group
benefit
plans
9
under
chapter
509A.
This
section
shall
not
apply
to
nonprofit,
10
nongovernmental
health
maintenance
organizations
with
respect
11
to
managed
care
plans
that
provide
a
majority
of
covered
health
12
care
services
through
a
single
contracted
medical
group.
13
b.
(1)
Three
years
after
the
first
service
contract
is
14
awarded
to
a
pharmacy
benefits
manager
pursuant
to
subsection
15
9,
paragraph
“a”
,
any
self-funded
private
sector
health
plan
16
with
substantial
participation
by
Iowa
employees
and
the
17
employees’
dependents
shall
have
the
option
to
conduct
a
18
pharmacy
benefits
manager
reverse
auction
for
the
specific
19
self-funded
private
sector
health
plan
utilizing
the
technology
20
platform
and
technology
operator
services
selected
by
the
21
department
under
this
section.
The
department
may
charge
the
22
self-funded
private
sector
health
plan
a
fee,
as
established
23
by
the
department
by
rule,
sufficient
to
cover
any
incremental
24
cost
associated
with
the
pharmacy
benefits
manager
reverse
25
auction.
26
(2)
A
pharmacy
benefits
manager
selected
by
a
self-funded
27
private
sector
health
plan
as
a
result
of
a
pharmacy
benefits
28
manager
reverse
auction
conducted
pursuant
to
subparagraph
29
(1)
shall
be
assessed
a
per-prescription
fee,
pursuant
to
30
subsection
11,
in
an
amount
determined
by
the
department
by
31
rule.
32
c.
Any
self-funded
public
sector
health
plans
or
self-funded
33
private
sector
health
plans
that
opt
to
conduct
a
pharmacy
34
benefits
manager
reverse
auction
shall
retain
full
autonomy
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over
determination
of
the
individual
health
plan’s
respective
1
prescription
drug
formularies
and
pharmacy
benefit
designs,
2
and
shall
not
be
required
to
adopt
a
common
prescription
drug
3
formulary
or
common
prescription
pharmacy
benefit
design.
4
d.
Any
pharmacy
benefits
manager
providing
services
to
the
5
department,
to
a
self-funded
public
sector
health
plan,
or
6
to
a
self-funded
private
sector
health
plan
as
described
in
7
this
section
shall
provide
the
department,
each
participating
8
self-funded
public
sector
health
plan,
and
each
participating
9
self-funded
private
sector
health
plan
access
to
complete
10
pharmacy
claims
data
necessary
to
conduct
the
pharmacy
11
benefits
manager
reverse
auction
and
to
carry
out
applicable
12
administrative
and
management
duties.
13
13.
Notwithstanding
subsection
3,
the
department
may
elect
14
to
vacate
the
outcome
of
a
pharmacy
benefits
manager
reverse
15
auction
if
the
lowest-cost
pharmacy
benefits
manager’s
bid
16
is
not
less
than
the
projected
cost
trend
for
the
incumbent
17
pharmacy
benefits
manager’s
services
contract
as
verified
by
18
the
department.
The
department
may
utilize
a
consultant
to
19
conduct
the
verification.
The
cost
trend
shall
be
projected
20
by
the
technology
platform
operator
using
industry-recognized
21
data
sources
and
shall
be
subject
to
review
and
approval
by
22
the
department
in
advance
of
the
pharmacy
benefits
manager
23
reverse
auction.
Methodology
shall
be
applied
consistently
in
24
projection
of
cost
and
savings
to
the
state
with
regard
to
the
25
incumbent
pharmacy
benefits
manager’s
services
contract
and
26
competing
pharmacy
benefits
manager
reverse
auction
bids.
>>
27
2.
By
renumbering,
redesignating,
and
correcting
internal
28
references
as
necessary.
29
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