Senate File 235 - Introduced SENATE FILE 235 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 1107) A BILL FOR An Act relating to the regulation of pharmacy benefits managers 1 and including effective date provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1631SV (2) 86 av/nh

S.F. 235 Section 1. Section 510B.3, subsection 1, Code 2015, is 1 amended to read as follows: 2 1. The commissioner shall enforce the provisions of this 3 chapter. After notice and hearing, the commissioner may impose 4 any or all of the sanctions set out in section 507B.7 and may 5 suspend or revoke a pharmacy benefits manager’s certificate 6 of registration as a third-party administrator pursuant to 7 chapter 510, upon finding that the pharmacy benefits manager 8 violated any of the requirements of this chapter or of chapter 9 510 pertaining to third-party administrators. 10 Sec. 2. Section 510B.3, Code 2015, is amended by adding the 11 following new subsections: 12 NEW SUBSECTION . 1A. A pharmacy benefits manager, as an 13 agent or vendor of an insurance company, is subject to the 14 commissioner’s authority to conduct an examination pursuant to 15 chapter 507. The procedures set forth in chapter 507 regarding 16 examination reports shall apply to an examination of a pharmacy 17 benefits manager under this chapter. 18 NEW SUBSECTION . 1B. A pharmacy benefits manager is subject 19 to the commissioner’s authority to conduct an investigation 20 pursuant to chapter 507B. The procedures set forth in chapter 21 507B regarding investigations shall apply to an investigation 22 of a pharmacy benefits manager under this chapter. 23 NEW SUBSECTION . 1C. A pharmacy benefits manager is subject 24 to the commissioner’s authority to conduct an examination, 25 audit, or inspection pursuant to chapter 510 for third-party 26 administrators. The procedures set forth in chapter 510 for 27 third-party administrators shall apply to an examination, 28 audit, or inspection of a pharmacy benefits manager under this 29 chapter. 30 NEW SUBSECTION . 1D. When the commissioner conducts an 31 examination of a pharmacy benefits manager under chapter 507; 32 an investigation under chapter 507B; or an examination, audit, 33 or inspection under chapter 510, all information received from 34 the pharmacy benefits manager, and all notes, work papers, or 35 -1- LSB 1631SV (2) 86 av/nh 1/ 2

S.F. 235 other documents related to the examination, investigation, 1 audit, or inspection of the pharmacy benefits manager are 2 confidential records under chapter 22 and shall be accorded 3 the same confidentiality as notes, work papers, investigatory 4 materials, or other documents related to the examination of an 5 insurer as provided in chapter 507. 6 Sec. 3. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 7 immediate importance, takes effect upon enactment. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill relates to the regulation of pharmacy benefits 12 managers. 13 The bill provides that after notice and hearing, the 14 commissioner of insurance may impose any or all of the 15 sanctions set out in Code section 507B.7 and may suspend 16 or revoke a pharmacy benefits manager’s certificate of 17 registration as a third-party administrator, upon finding that 18 the pharmacy benefits manager violated any of the requirements 19 of Code chapter 510B (regulation of pharmacy benefits 20 managers), 510 (regulation of third-party administrators), or 21 507B (regulation of insurance trade practices). 22 The bill provides that a pharmacy benefits manager is 23 subject to the commissioner’s authority to conduct an 24 examination pursuant to Code chapter 507B; conduct an 25 investigation pursuant to Code chapter 507B; and conduct an 26 examination, audit, or inspection pursuant to Code chapter 510 27 for third-party administrators. The bill also provides that 28 when the commissioner undertakes any of these activities, all 29 notes, work papers, or other documents related to the activity 30 are confidential records under Code chapter 22 and are accorded 31 the same confidentiality as such materials related to the 32 examination of an insurer as provided in Code chapter 507. 33 The bill is effective upon enactment. 34 -2- LSB 1631SV (2) 86 av/nh 2/ 2