Senate File 383 H-1302 Amend Senate File 383, as amended, passed, and reprinted by 1 the Senate, as follows: 2 1. By striking everything after the enacting clause and 3 inserting: 4 < DIVISION I 5 PHARMACY BENEFITS MANAGERS 6 Section 1. Section 510B.1, Code 2025, is amended by adding 7 the following new subsections: 8 NEW SUBSECTION . 11A. “National average drug acquisition 9 cost” means the monthly survey of retail pharmacies conducted 10 by the federal centers for Medicare and Medicaid services 11 to determine average acquisition cost for Medicaid covered 12 outpatient drugs. 13 NEW SUBSECTION . 11B. “Pass-through pricing” means a 14 model of prescription drug pricing in which payments made 15 by a third-party payor to a pharmacy benefits manager for 16 prescription drugs are equivalent to the payments the pharmacy 17 benefits manager makes to the dispensing pharmacy or dispensing 18 health care provider for the prescription drugs, including any 19 professional dispensing fee. 20 NEW SUBSECTION . 21A. “Specialty drug” means a drug used 21 to treat chronic and complex, or rare medical conditions and 22 that requires special handling or administration, provider care 23 coordination, or patient education that cannot be provided by a 24 nonspecialty pharmacy or pharmacist. 25 NEW SUBSECTION . 21B. “Spread pricing” means a pharmacy 26 benefits manager charges a third-party payor more for 27 prescription drugs dispensed to a covered person than the 28 amount the pharmacy benefits manager reimburses the pharmacy 29 for dispensing the prescription drugs to a covered person. 30 NEW SUBSECTION . 22A. “Wholesale acquisition cost” means the 31 same as defined in 42 U.S.C. §1395w-3a(c)(6)(B). 32 Sec. 2. NEW SECTION . 510B.4B Prohibited conduct. 33 1. A pharmacy benefits manager shall not require a covered 34 person, as a condition of payment or reimbursement, to purchase 35 -1- SF 383.1863 (1) 91 nls/ko 1/ 7 #1.

pharmacy services, including prescription drugs, exclusively 1 through a mail order pharmacy. This subsection shall not apply 2 to a specialty drug. 3 2. A pharmacy benefits manager shall not unreasonably 4 designate a prescription drug as a specialty drug to prevent 5 a covered person from accessing the prescription drug, or 6 limiting a covered person’s access to the prescription drug, 7 from a pharmacy or pharmacist that is within the health 8 carrier’s network. A covered person or pharmacy harmed by an 9 alleged violation of this subsection may file a complaint with 10 the commissioner and the commissioner shall, in consultation 11 with the board of pharmacy, make a determination if the covered 12 prescription drug meets the definition of specialty drug. 13 Sec. 3. Section 510B.8, Code 2025, is amended by adding the 14 following new subsection: 15 NEW SUBSECTION . 3. For the purpose of reducing premiums, 16 one hundred percent of all rebates received by a pharmacy 17 benefits manager shall be passed through to the health carrier, 18 or to the employee plan sponsor as permitted by the federal 19 Employee Retirement Income Security Act of 1974, 29 U.S.C. 20 §1001, et seq. 21 Sec. 4. Section 510B.8B, Code 2025, is amended to read as 22 follows: 23 510B.8B Pharmacy benefits manager affiliates managers —— 24 reimbursement reimbursements . 25 1. A pharmacy benefits manager shall not reimburse any 26 pharmacy located in the state in an amount less than the amount 27 that the pharmacy benefits manager reimburses a pharmacy 28 benefits manager affiliate for dispensing the same prescription 29 drug as dispensed by the pharmacy. The reimbursement amount 30 shall be calculated on a per unit basis based on the same 31 generic product identifier or generic code number. 32 2. a. A pharmacy benefits manager shall not reimburse any 33 pharmacy located in the state in an amount less than the most 34 recently published national average drug acquisition cost for 35 -2- SF 383.1863 (1) 91 nls/ko 2/ 7

a prescription drug on the date that the prescription drug is 1 administered or dispensed. If the most recently published 2 national average drug acquisition cost for the prescription 3 drug is unavailable on the date that the prescription drug is 4 administered or dispensed, a pharmacy benefits manager shall 5 not reimburse any pharmacy located in the state in an amount 6 less than the wholesale acquisition cost for the prescription 7 drug on the date that the prescription drug is administered or 8 dispensed. 9 b. In addition to the reimbursement under paragraph “a” , 10 an agreement executed by a pharmacy benefits manager and a 11 pharmacy may, at the discretion of the pharmacy, require 12 the pharmacy benefits manager to reimburse the pharmacy 13 a professional dispensing fee for all prescription drugs 14 dispensed by the pharmacy in an amount not to exceed ten 15 dollars and sixty-eight cents if any of the following apply: 16 (1) The pharmacy has gross annual revenue of less than two 17 hundred fifty million dollars. For purposes of determining a 18 pharmacy’s gross annual revenue under this subparagraph, the 19 gross revenue of all pharmacies under common ownership shall 20 be aggregated. 21 (2) The pharmacy has gross annual revenue of two hundred 22 fifty million dollars or greater and is located at least 23 ten miles away from the nearest pharmacy. For purposes of 24 determining a pharmacy’s gross annual revenue under this 25 subparagraph, the gross revenue of all pharmacies under common 26 ownership shall be aggregated. 27 c. Paragraphs “a” and “b” do not apply to either of the 28 following: 29 (1) A specialty drug dispensed by a pharmacy located in this 30 state. 31 (2) A pharmacy located in this state that is a covered 32 entity as defined under 42 U.S.C. §256b. 33 3. Each pharmacy located in the state shall participate 34 in the national average drug acquisition cost survey for all 35 -3- SF 383.1863 (1) 91 nls/ko 3/ 7

prescription drugs dispensed by the pharmacy. 1 Sec. 5. NEW SECTION . 510B.8D Pharmacy benefits manager 2 contracts. 3 1. All contracts executed, amended, adjusted, or renewed 4 on or after July 1, 2025, that apply to prescription drug 5 benefits on or after January 1, 2026, between a pharmacy 6 benefits manager and a third-party payor, or between a person 7 and a third-party payor, shall include all of the following 8 requirements: 9 a. The pharmacy benefits manager shall use pass-through 10 pricing unless paragraph “b” applies. 11 b. The pharmacy benefits manager may use direct or indirect 12 spread pricing only if the difference between the amount the 13 third-party payor pays the pharmacy benefits manager for a 14 prescription drug and the amount the pharmacy benefits manager 15 reimburses the dispensing pharmacy or dispensing health care 16 provider for the prescription drug is passed through by the 17 pharmacy benefits manager to the person contracted to receive 18 third-party payor services. 19 c. Payments received by a pharmacy benefits manager for 20 services provided by the pharmacy benefits manager to a 21 third-party payor or to a pharmacy shall be used or distributed 22 pursuant to the pharmacy benefits manager’s contract with 23 the third-party payor or with the pharmacy, or as otherwise 24 required by law. 25 2. Unless otherwise prohibited by law, subsection 1 shall 26 supersede any contractual terms to the contrary in any contract 27 executed, amended, adjusted, or renewed on or after July 1, 28 2025, that applies to prescription drug benefits on or after 29 January 1, 2026, between a pharmacy benefits manager and a 30 third-party payor, or between a person and a third-party payor. 31 Sec. 6. NEW SECTION . 510B.8E Appeals and disputes. 32 1. A pharmacy benefits manager shall provide a reasonable 33 process to allow a pharmacy to appeal a reimbursement rate for 34 a specific prescription drug if the pharmacy benefits manager 35 -4- SF 383.1863 (1) 91 nls/ko 4/ 7

violates section 510B.8A or 510B.8B. 1 2. The appeals process must include all of the following: 2 a. A dedicated telephone number at which a pharmacy may 3 contact the pharmacy benefits manager and speak directly with 4 an individual who is involved with the appeals process. 5 b. A dedicated electronic mail address or internet site for 6 the purpose of submitting an appeal directly to the pharmacy 7 benefits manager. 8 c. A period of no less than thirty business days after the 9 date of a pharmacy’s initial submission of a clean claim during 10 which the pharmacy may initiate an appeal. 11 3. The pharmacy benefits manager shall respond to an appeal 12 within seven business days after the date on which the pharmacy 13 benefits manager receives the appeal. 14 a. If the pharmacy benefits manager grants a pharmacy’s 15 appeal, the pharmacy benefits manager shall do all of the 16 following: 17 (1) Adjust the reimbursement rate of the prescription drug 18 that is the subject of the appeal and provide the national drug 19 code number that the adjustment is based on to the appealing 20 pharmacy. 21 (2) Reverse and resubmit the claim that is the subject of 22 the appeal. 23 b. If the pharmacy benefits manager denies a pharmacy’s 24 appeal, the pharmacy may submit the denial to the commissioner 25 for examination. 26 Sec. 7. EFFECTIVE DATE. This division of this Act takes 27 effect January 1, 2026. 28 Sec. 8. APPLICABILITY. This division of this Act applies 29 to pharmacy benefits managers, health carriers, third-party 30 payors, and health benefit plans that manage a prescription 31 drug benefit in the state on or after July 1, 2025. 32 DIVISION II 33 PHARMACY SERVICES ADMINISTRATIVE ORGANIZATIONS AND WHOLESALE 34 DISTRIBUTION 35 -5- SF 383.1863 (1) 91 nls/ko 5/ 7

Sec. 9. PHARMACY SERVICES ADMINISTRATIVE ORGANIZATIONS AND 1 WHOLESALE DISTRIBUTION OF PRESCRIPTION DRUGS —— REPORT. 2 1. By January 1, 2026, the commissioner of insurance, or 3 the commissioner of insurance’s designee, shall review pharmacy 4 services administrative organizations and the wholesale 5 distribution of prescription drugs, and submit a report to the 6 general assembly containing the commissioner’s findings and 7 recommendations. The report shall include, at a minimum, all 8 of the following: 9 a. A description and analysis of the prescription drug 10 wholesale distribution supply chain, including the market 11 concentration for the wholesale distribution of prescription 12 drugs, margins in the wholesale distribution of prescription 13 drugs, and the competition in the wholesale distribution of 14 prescription drugs. 15 b. A description of the role that pharmacy services 16 administrative organizations serve in the prescription drug 17 supply chain. 18 c. A description and analysis of the relationships between 19 pharmacy services administrative organizations, prescription 20 drug wholesalers, and retail pharmacies, including but 21 not limited to standard contracting terms, fees charged to 22 pharmacies, and contractual restrictions and limitations 23 applicable to retail pharmacies. 24 2. a. The commissioner of insurance shall submit the report 25 under subsection 1 in a manner that does not publicly disclose 26 any of the following: 27 (1) The identity of a specific pharmacy services 28 administrative organization or prescription drug wholesaler. 29 (2) The price charged to a specific pharmacy for a specific 30 prescription drug. 31 b. Information provided by the commissioner under this 32 section that may reveal the identity of a specific pharmacy 33 services administrative organization or prescription drug 34 wholesaler, or the price charged to a specific pharmacy for a 35 -6- SF 383.1863 (1) 91 nls/ko 6/ 7 #1.