House File 852 H-1291 Amend House File 852 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 PHARMACY BENEFITS MANAGERS 5 Section 1. Section 510B.1, Code 2025, is amended by adding 6 the following new subsections: 7 NEW SUBSECTION . 11A. “National average drug acquisition 8 cost” means the monthly survey of retail pharmacies conducted 9 by the federal centers for Medicare and Medicaid services 10 to determine average acquisition cost for Medicaid covered 11 outpatient drugs. 12 NEW SUBSECTION . 11B. “Pass-through pricing” means a 13 model of prescription drug pricing in which payments made 14 by a third-party payor to a pharmacy benefits manager for 15 prescription drugs are equivalent to the payments the pharmacy 16 benefits manager makes to the dispensing pharmacy or dispensing 17 health care provider for the prescription drugs, including any 18 professional dispensing fee. 19 NEW SUBSECTION . 16A. “Pharmacy chain” means an entity that 20 has twenty or more pharmacies under common ownership or control 21 located in at least twenty or more states. 22 NEW SUBSECTION . 21A. “Retail pharmacy” means a pharmacy 23 that is not a pharmacy chain or a publicly traded entity, and 24 that does not exclusively provide mail order dispensing of 25 prescription drugs. 26 NEW SUBSECTION . 21B. “Specialty drug” means a drug used 27 to treat chronic and complex, or rare medical conditions and 28 that requires special handling or administration, provider care 29 coordination, or patient education that cannot be provided by a 30 nonspecialty pharmacy or pharmacist. 31 NEW SUBSECTION . 22A. “Wholesale acquisition cost” means the 32 same as defined in 42 U.S.C. §1395w-3a(c)(6)(B). 33 Sec. 2. Section 510B.4, Code 2025, is amended by adding the 34 following new subsection: 35 -1- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 1/ 10 #1.

NEW SUBSECTION . 4. A pharmacy benefits manager, health 1 carrier, health benefit plan, or third-party payor shall not 2 discriminate against a pharmacy or a pharmacist with respect to 3 participation, referral, reimbursement of a covered service, or 4 indemnification if a pharmacist is acting within the scope of 5 the pharmacist’s license, as permitted under state law, and the 6 pharmacy is operating in compliance with all applicable laws 7 and rules. 8 Sec. 3. NEW SECTION . 510B.4B Prohibited conduct —— pharmacy 9 rights. 10 1. A pharmacy benefits manager shall not do any of the 11 following: 12 a. If a pharmacy or pharmacist has agreed to participate 13 in a covered person’s health benefit plan, prohibit or limit 14 the covered person from selecting a pharmacy or pharmacist of 15 the covered person’s choice, or impose a monetary advantage 16 or penalty that would affect a covered person’s choice. 17 A monetary advantage or penalty includes a copayment or 18 coinsurance variation, a reduction in reimbursement for 19 services, a promotion of one participating pharmacy over 20 another, or comparing the reimbursement rates of a pharmacy 21 against mail order pharmacy reimbursement rates. 22 b. Deny a pharmacy or pharmacist the right to participate as 23 a contract provider under a health benefit plan if the pharmacy 24 or pharmacist agrees to provide pharmacy services that meet 25 the terms and requirements of the health benefit plan and the 26 pharmacy or pharmacist agrees to the terms of reimbursement 27 set forth by the third-party payor for similarly classified 28 pharmacies. 29 c. Impose upon a pharmacy or pharmacist, as a condition 30 of participation in a third-party payor network, any course 31 of study, accreditation, certification, or credentialing that 32 is inconsistent with, more stringent than, or in addition to 33 state requirements for licensure or certification, and the 34 administrative rules adopted by the board of pharmacy. 35 -2- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 2/ 10

d. Unreasonably designate a prescription drug as a 1 specialty drug to prevent a covered person from accessing 2 the prescription drug, or limiting a covered person’s access 3 to the prescription drug, from a pharmacy or pharmacist that 4 is within the health carrier’s network. A covered person or 5 pharmacy harmed by an alleged violation of this paragraph may 6 file a complaint with the commissioner, and the commissioner 7 shall, in consultation with the board of pharmacy, make a 8 determination as to whether the covered prescription drug meets 9 the definition of a specialty drug. 10 e. Require a covered person, as a condition of payment 11 or reimbursement, to purchase pharmacy services, including 12 prescription drugs, exclusively through a mail order pharmacy. 13 f. Impose upon a covered person a copayment, reimbursement 14 amount, number of days of a prescription drug supply for 15 which reimbursement will be allowed, or any other payment 16 or condition relating to purchasing pharmacy services from 17 a pharmacy that is more costly or restrictive than would be 18 imposed upon the covered person if such pharmacy services were 19 purchased from a mail order pharmacy, or any other pharmacy 20 that can provide the same pharmacy services for the same cost 21 and copayment as a mail order service. 22 2. a. If a third-party payor providing reimbursement to 23 covered persons for prescription drugs restricts pharmacy 24 participation, the third-party payor shall notify, in writing, 25 all pharmacies within the geographical coverage area of the 26 health benefit plan restriction, and offer the pharmacies 27 the opportunity to participate in the health benefit plan at 28 least sixty days prior to the effective date of the health 29 benefit plan restriction. All pharmacies in the geographical 30 coverage area of the health benefit plan shall be eligible to 31 participate under identical reimbursement terms for providing 32 pharmacy services and prescription drugs. 33 b. The third-party payor shall inform covered persons of 34 the names and locations of all pharmacies participating in 35 -3- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 3/ 10

the health benefit plan as providers of pharmacy services and 1 prescription drugs. 2 c. A participating pharmacy shall be entitled to announce to 3 the pharmacy’s customers that the pharmacy participates in the 4 health benefit plan. 5 3. The commissioner shall not certify a pharmacy benefits 6 manager or license an insurance producer that is not in 7 compliance with this section. 8 4. A covered person or pharmacy injured by a violation 9 of this section may maintain a cause of action to enjoin the 10 continuation of the violation. 11 Sec. 4. Section 510B.8, Code 2025, is amended by adding the 12 following new subsections: 13 NEW SUBSECTION . 3. A pharmacy benefits manager shall not 14 impose different cost-sharing or additional fees on a covered 15 person based on the pharmacy at which the covered person fills 16 a prescription drug order. 17 NEW SUBSECTION . 4. For the purpose of reducing premiums, 18 one hundred percent of all rebates received by a pharmacy 19 benefits manager shall be passed through to the health carrier, 20 or to the employee plan sponsor as permitted by the federal 21 Employee Retirement Income Security Act of 1974, 29 U.S.C. 22 §1001, et seq. 23 NEW SUBSECTION . 5. A pharmacy benefits manager shall 24 include any amount paid by a covered person, or on behalf of 25 a covered person, when calculating the covered person’s total 26 contribution toward the covered person’s cost-sharing. 27 NEW SUBSECTION . 6. Any amount paid by a covered person for 28 a prescription drug shall be applied to any deductible imposed 29 on the covered person by the covered person’s health benefit 30 plan in accordance with the health benefit plan’s coverage 31 documents. 32 NEW SUBSECTION . 7. If a covered person’s policy, contract, 33 or plan providing for third-party payment or prepayment of 34 health or medical expenses qualifies as a high-deductible 35 -4- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 4/ 10

health plan under section 223 of the Internal Revenue Code, 1 and a copayment, coinsurance, or deductible paid by the 2 covered person as a cost-sharing requirement under this chapter 3 would result in the covered person becoming ineligible for a 4 health savings account associated with the covered person’s 5 high-deductible health plan, subsection 5 shall apply only 6 after the covered person satisfies the covered person’s minimum 7 deductible, except for items or services determined to be 8 preventive care under section 223(c)(2)(C) of the Internal 9 Revenue Code. 10 Sec. 5. Section 510B.8B, Code 2025, is amended to read as 11 follows: 12 510B.8B Pharmacy benefits manager affiliates managers —— 13 reimbursement reimbursements . 14 1. A pharmacy benefits manager shall not reimburse any 15 pharmacy located in the state in an amount less than the amount 16 that the pharmacy benefits manager reimburses a pharmacy 17 benefits manager affiliate for dispensing the same prescription 18 drug as dispensed by the pharmacy. The reimbursement amount 19 shall be calculated on a per unit basis based on the same 20 generic product identifier or generic code number. 21 2. A pharmacy benefits manager shall not reimburse any 22 retail pharmacy located in the state in an amount less than the 23 most recently published national average drug acquisition cost 24 for a prescription drug on the date that the prescription drug 25 is administered or dispensed. If the most recently published 26 national average drug acquisition cost for the prescription 27 drug is unavailable on the date that the prescription drug is 28 administered or dispensed, a pharmacy benefits manager shall 29 not reimburse any retail pharmacy located in the state in 30 an amount less than the wholesale acquisition cost for the 31 prescription drug on the date that the prescription drug is 32 administered or dispensed. 33 3. In addition to the reimbursement required under 34 subsection 2, a pharmacy benefits manager shall reimburse the 35 -5- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 5/ 10

retail pharmacy or pharmacist a professional dispensing fee in 1 the amount of ten dollars and sixty-eight cents. 2 4. a. A pharmacy benefits manager shall submit a quarterly 3 report to the commissioner of all drugs reimbursed at ten 4 percent or more below the national average drug acquisition 5 cost, and all drugs reimbursed at ten percent or more above the 6 national average drug acquisition cost, for each prescription 7 drug appearing on the national average drug acquisition cost 8 list on the day the prescription drug was dispensed. 9 b. For each prescription drug included in the report, a 10 pharmacy benefits manager shall include all of the following 11 information: 12 (1) The month the prescription drug was dispensed. 13 (2) The quantity of the prescription drug dispensed. 14 (3) The amount the pharmacy was reimbursed. 15 (4) If the dispensing pharmacy was an affiliate of the 16 pharmacy benefits manager. 17 (5) If the prescription drug was dispensed pursuant to a 18 government health plan. 19 (6) The average national drug acquisition cost for the month 20 the prescription drug was dispensed. 21 c. The report shall exclude drugs dispensed pursuant to 42 22 U.S.C. §256b. 23 d. A copy of the report shall be published on the pharmacy 24 benefits manager’s public internet site for twenty-four months 25 after the date the report is submitted to the commission. 26 5. This section shall not apply to a pharmacy that operates 27 in a state-owned facility. 28 Sec. 6. NEW SECTION . 510B.8D Pharmacy benefits manager 29 contracts. 30 1. All contracts executed, amended, adjusted, or renewed 31 on or after July 1, 2025, that apply to prescription drug 32 benefits on or after January 1, 2026, between a pharmacy 33 benefits manager and a third-party payor, or between a person 34 and a third-party payor, shall include all of the following 35 -6- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 6/ 10

requirements: 1 a. The pharmacy benefits manager shall use pass-through 2 pricing. 3 b. Payments received by a pharmacy benefits manager for 4 services provided by the pharmacy benefits manager to a 5 third-party payor or to a pharmacy shall be used or distributed 6 pursuant to the pharmacy benefits manager’s contract with 7 the third-party payor or with the pharmacy, or as otherwise 8 required by law. 9 2. Unless otherwise prohibited by law, subsection 1 shall 10 supersede any contractual terms to the contrary in any contract 11 executed, amended, adjusted, or renewed on or after July 1, 12 2025, that applies to prescription drug benefits on or after 13 January 1, 2026, between a pharmacy benefits manager and a 14 third-party payor, or between a person and a third-party payor. 15 Sec. 7. NEW SECTION . 510B.8E Appeals and disputes. 16 1. A pharmacy benefits manager shall provide a reasonable 17 process to allow a pharmacy to appeal any matter. 18 2. The appeals process must include all of the following: 19 a. A dedicated telephone number at which a pharmacy may 20 contact the pharmacy benefits manager and speak directly with 21 an individual who is involved with the appeals process. 22 b. A dedicated electronic mail address or internet site for 23 the purpose of submitting an appeal directly to the pharmacy 24 benefits manager. 25 c. A period of no less than thirty business days after the 26 date of a pharmacy’s initial submission of a clean claim during 27 which the pharmacy may initiate an appeal. 28 3. The pharmacy benefits manger shall respond to an appeal 29 within seven business days after the date on which the pharmacy 30 benefits manager receives the appeal. 31 a. If the pharmacy benefits manager grants a pharmacy’s 32 appeal related to a reimbursement rate, the pharmacy benefits 33 manager shall do all of the following: 34 (1) Adjust the reimbursement rate of the prescription drug 35 -7- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 7/ 10

that is the subject of the appeal and provide the national drug 1 code number that the adjustment is based on to the appealing 2 pharmacy. 3 (2) Reverse and resubmit the claim that is the subject of 4 the appeal. 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 reimbursement rate. 12 b. If the pharmacy benefits manager denies a pharmacy’s 13 appeal, the pharmacy benefits manager shall do all of the 14 following: 15 (1) Provide the appealing pharmacy the national drug 16 code number and the name of a wholesale distributor licensed 17 pursuant to section 155A.17 from which the pharmacy can obtain 18 the prescription drug at or below the reimbursement rate. 19 (2) If the prescription drug identified by the national 20 drug code number provided by the pharmacy benefits manager 21 pursuant to subparagraph (1) is not available below the 22 pharmacy acquisition cost from the wholesale distributor from 23 whom the pharmacy purchases the majority of its prescription 24 drugs for resale, the pharmacy benefits manager shall adjust 25 the reimbursement rate above the appealing pharmacy’s pharmacy 26 acquisition cost, and reverse and resubmit each claim affected 27 by the pharmacy’s inability to procure the prescription drug 28 at a cost that is equal to or less than the previously appealed 29 reimbursement rate. 30 Sec. 8. SEVERABILITY. The provisions of this division of 31 this Act are severable pursuant to section 4.12. 32 Sec. 9. APPLICABILITY. This division of this Act applies 33 to pharmacy benefits managers, health carriers, third-party 34 payors, and health benefit plans that manage a prescription 35 -8- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 8/ 10

drug benefit in the state on or after July 1, 2025. 1 DIVISION II 2 PHARMACY SERVICES ADMINISTRATIVE ORGANIZATIONS AND WHOLESALE 3 DISTRIBUTION OF PRESCRIPTION DRUGS 4 Sec. 10. PHARMACY SERVICES ADMINISTRATIVE ORGANIZATIONS AND 5 WHOLESALE DISTRIBUTION OF PRESCRIPTION DRUGS —— REPORT. 6 1. By January 1, 2026, the commissioner of insurance, or 7 the commissioner of insurance’s designee, shall review pharmacy 8 services administrative organizations and the wholesale 9 distribution of prescription drugs, and submit a report to the 10 general assembly containing the commissioner’s findings and 11 recommendations. The report shall include, at a minimum, all 12 of the following: 13 a. A description and analysis of the prescription drug 14 wholesale distribution supply chain, including the market 15 concentration for the wholesale distribution of prescription 16 drugs, margins in the wholesale distribution of prescription 17 drugs, and the competition in the wholesale distribution of 18 prescription drugs. 19 b. A description of the role that pharmacy services 20 administrative organizations serve in the prescription drug 21 supply chain. 22 c. A description and analysis of the relationships between 23 pharmacy services administrative organizations, prescription 24 drug wholesalers, and retail pharmacies, including but 25 not limited to standard contracting terms, fees charged to 26 pharmacies, and contractual restrictions and limitations 27 applicable to retail pharmacies. 28 2. a. The commissioner of insurance shall submit the report 29 under subsection 1 in a manner that does not publicly disclose 30 any of the following: 31 (1) The identity of a specific pharmacy services 32 administrative organization or prescription drug wholesaler. 33 (2) The price charged to a specific pharmacy for a specific 34 prescription drug. 35 -9- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 9/ 10 #1.

b. Information provided by the commissioner under this 1 section that may reveal the identity of a specific pharmacy 2 services administrative organization or prescription drug 3 wholesaler, or the price charged to a specific pharmacy for a 4 specific prescription drug, shall be considered a confidential 5 record. > 6 2. Title page, by striking lines 1 and 2 and inserting 7 < An Act relating to pharmacy benefits managers, pharmacies, 8 prescription drugs, and pharmacy services administrative 9 organizations, and including applicability provisions. > 10 ______________________________ BARKER of Story -10- HF 852.1793 (1) 91 (amending this HF 852 to CONFORM to SF 383) nls/ko 10/ 10 #2.