S.F. 383 Section 1. Section 510B.1, Code 2025, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 11A. “National average drug acquisition 3 cost” means the monthly survey of retail pharmacies conducted 4 by the federal centers for Medicare and Medicaid services 5 to determine average acquisition cost for Medicaid covered 6 outpatient drugs. 7 NEW SUBSECTION . 11B. “Pass-through pricing” means a 8 model of prescription drug pricing in which payments made 9 by a third-party payor to a pharmacy benefits manager for 10 prescription drugs are equivalent to the payments the pharmacy 11 benefits manager makes to the dispensing pharmacy or dispensing 12 health care provider for the prescription drugs, including any 13 professional dispensing fee. 14 NEW SUBSECTION . 21A. “Specialty drug” means a drug used 15 to treat chronic and complex, or rare medical conditions and 16 that requires special handling or administration, provider care 17 coordination, or patient education that cannot be provided by a 18 nonspecialty pharmacy or pharmacist. 19 NEW SUBSECTION . 21B. “Spread pricing” means a pharmacy 20 benefits manager charges a third-party payor more for 21 prescription drugs dispensed to a covered person than the 22 amount the pharmacy benefits manager reimburses the pharmacy 23 for dispensing the prescription drugs to a covered person. 24 NEW SUBSECTION . 22A. “Wholesale acquisition cost” means the 25 same as defined in 42 U.S.C. §1395w-3a(c)(6)(B). 26 Sec. 2. Section 510B.4, Code 2025, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 4. A pharmacy benefits manager, health 29 carrier, health benefit plan, or third-party payor shall not 30 discriminate against a pharmacy or a pharmacist with respect to 31 participation, referral, reimbursement of a covered service, or 32 indemnification if a pharmacist is acting within the scope of 33 the pharmacist’s license, as permitted under state law, and the 34 pharmacy is operating in compliance with all applicable laws 35 -1- LSB 1492SV (3) 91 nls/ko 1/ 11

S.F. 383 and rules. 1 Sec. 3. NEW SECTION . 510B.4B Prohibited conduct —— pharmacy 2 rights. 3 1. A pharmacy benefits manager shall not do any of the 4 following: 5 a. Where a pharmacy or pharmacist has agreed to participate 6 in a covered person’s health benefit plan, prohibit or limit 7 the covered person from selecting a pharmacy or pharmacist of 8 the covered person’s choice, or impose a monetary advantage 9 or penalty that would affect a covered person’s choice. A 10 monetary advantage or penalty includes a higher copayment, a 11 reduction in reimbursement for services, or promotion of one 12 participating pharmacy over another. 13 b. Deny a pharmacy or pharmacist the right to participate as 14 a contract provider under a health benefit plan if the pharmacy 15 or pharmacist agrees to provide pharmacy services that meet 16 the terms and requirements of the health benefit plan and the 17 pharmacy or pharmacist agrees to the terms of reimbursement set 18 forth by the third-party payor. 19 c. Impose upon a pharmacy or pharmacist, as a condition 20 of participation in a third-party payor network, any course 21 of study, accreditation, certification, or credentialing that 22 is inconsistent with, more stringent than, or in addition to 23 state requirements for licensure or certification, and the 24 administrative rules adopted by the board of pharmacy. 25 d. Unreasonably designate a prescription drug as a 26 specialty drug to prevent a covered person from accessing 27 the prescription drug, or limiting a covered person’s access 28 to the prescription drug, from a pharmacy or pharmacist that 29 is within the health carrier’s network. A covered person or 30 pharmacy harmed by an alleged violation of this paragraph may 31 file a complaint with the commissioner, and the commissioner 32 shall, in consultation with the board of pharmacy, make a 33 determination as to whether the covered prescription drug meets 34 the definition of a specialty drug. 35 -2- LSB 1492SV (3) 91 nls/ko 2/ 11

S.F. 383 e. Require a covered person, as a condition of payment 1 or reimbursement, to purchase pharmacy services, including 2 prescription drugs, exclusively through a mail order pharmacy. 3 f. Impose upon a covered person a copayment, reimbursement 4 amount, number of days of a prescription drug supply for 5 which reimbursement will be allowed, or any other payment 6 or condition relating to purchasing pharmacy services from 7 a pharmacy that is more costly or restrictive than would be 8 imposed upon the covered person if such pharmacy services were 9 purchased from a mail order pharmacy, or any other pharmacy 10 that can provide the same pharmacy services for the same cost 11 and copayment as a mail order service. 12 2. a. If a third-party payor providing reimbursement to 13 covered persons for prescription drugs restricts pharmacy 14 participation, the third-party payor shall notify, in writing, 15 all pharmacies within the geographical coverage area of the 16 health benefit plan restriction, and offer the pharmacies 17 the opportunity to participate in the health benefit plan at 18 least sixty days prior to the effective date of the health 19 benefit plan restriction. All pharmacies in the geographical 20 coverage area of the health benefit plan shall be eligible to 21 participate under identical reimbursement terms for providing 22 pharmacy services and prescription drugs. 23 b. The third-party payor shall inform covered persons of 24 the names and locations of all pharmacies participating in 25 the health benefit plan as providers of pharmacy services and 26 prescription drugs. 27 c. A participating pharmacy shall be entitled to announce 28 the pharmacy’s participation in the health benefit plan to the 29 pharmacy’s customers. 30 3. The commissioner shall not certify a pharmacy benefits 31 manager or license an insurance producer that is not in 32 compliance with this section. 33 4. A covered person or pharmacy injured by a violation 34 of this section may maintain a cause of action to enjoin the 35 -3- LSB 1492SV (3) 91 nls/ko 3/ 11

S.F. 383 continuation of the violation. 1 5. This section shall not apply to an entity that owns 2 and operates the entity’s own facility, employs or contracts 3 with physicians, pharmacists, nurses, or other health care 4 personnel, and that dispenses prescription drugs from the 5 entity’s pharmacy to the entity’s employees and dependents 6 enrolled in the entity’s health benefit plan, except that 7 this section shall apply to an entity otherwise excluded that 8 contracts with an outside pharmacy or group of pharmacies 9 to provide prescription drugs and services to the entity’s 10 employees and dependents enrolled in the entity’s health 11 benefit plan. 12 Sec. 4. Section 510B.8, Code 2025, is amended by adding the 13 following new subsections: 14 NEW SUBSECTION . 3. A pharmacy benefits manager shall not 15 impose different cost-sharing or additional fees on a covered 16 person based on the pharmacy at which the covered person fills 17 a prescription drug order. 18 NEW SUBSECTION . 4. a. A covered person’s cost-sharing 19 for a prescription drug shall be calculated at the point of 20 sale based on a price that is reduced by an amount equal to 21 at least one hundred percent of all rebates that have been 22 received, or that will be received, by the health carrier or a 23 pharmacy benefits manager in connection with the dispensing or 24 administration of the prescription drug. Any additional rebate 25 in excess of the required cost sharing shall be passed on to 26 the health benefit plan for the purpose of reducing premiums. 27 b. A health carrier shall not be precluded from decreasing 28 a covered person’s cost-sharing by an amount greater than the 29 covered person’s cost-sharing as calculated under paragraph 30 “a” . 31 NEW SUBSECTION . 5. A pharmacy benefits manager shall 32 include any amount paid by a covered person, or on behalf of 33 a covered person, when calculating the covered person’s total 34 contribution toward the covered person’s cost-sharing. 35 -4- LSB 1492SV (3) 91 nls/ko 4/ 11

S.F. 383 NEW SUBSECTION . 6. Any amount paid by a covered person for 1 a prescription drug shall be applied to any deductible imposed 2 on the covered person by the covered person’s health benefit 3 plan in accordance with the health benefit plan’s coverage 4 documents. 5 Sec. 5. Section 510B.8B, Code 2025, is amended to read as 6 follows: 7 510B.8B Pharmacy benefits manager affiliates managers —— 8 reimbursement reimbursements . 9 1. A pharmacy benefits manager shall not reimburse any 10 pharmacy located in the state in an amount less than the amount 11 that the pharmacy benefits manager reimburses a pharmacy 12 benefits manager affiliate for dispensing the same prescription 13 drug as dispensed by the pharmacy. The reimbursement amount 14 shall be calculated on a per unit basis based on the same 15 generic product identifier or generic code number. 16 2. A pharmacy benefits manager shall not reimburse any 17 pharmacy located in the state in an amount less than the most 18 recently published national average drug acquisition cost for 19 a prescription drug on the date that the prescription drug is 20 administered or dispensed. If the most recently published 21 national average drug acquisition cost for the prescription 22 drug is unavailable on the date that the prescription drug is 23 administered or dispensed, a pharmacy benefits manager shall 24 not reimburse any pharmacy located in the state in an amount 25 less than the wholesale acquisition cost for the prescription 26 drug on the date that the prescription drug is administered or 27 dispensed. 28 3. In addition to the reimbursement required under 29 subsection 2, a pharmacy benefits manager shall reimburse the 30 pharmacy or pharmacist a professional dispensing fee in the 31 amount of ten dollars and sixty-eight cents. 32 4. a. A pharmacy benefits manager shall submit a quarterly 33 report to the commissioner of all drugs reimbursed ten percent 34 or less below the national average drug acquisition cost, and 35 -5- LSB 1492SV (3) 91 nls/ko 5/ 11

S.F. 383 all drugs reimbursed ten percent or greater than the national 1 average drug acquisition cost, for each prescription drug 2 appearing on the national average drug acquisition cost list on 3 the day the prescription drug was dispensed. 4 b. For each prescription drug included in the report, a 5 pharmacy benefits manager shall include all of the following 6 information: 7 (1) The month the prescription drug was dispensed. 8 (2) The quantity of the prescription drug dispensed. 9 (3) The amount the pharmacy was reimbursed. 10 (4) If the dispensing pharmacy was an affiliate of the 11 pharmacy benefits manager. 12 (5) If the prescription drug was dispensed pursuant to a 13 government health plan. 14 (6) The average national drug acquisition cost for the month 15 the prescription drug was dispensed. 16 c. The report shall exclude drugs dispensed pursuant to 42 17 U.S.C. §256b. 18 d. A copy of the report shall be published on the pharmacy 19 benefits manager’s public internet site for a period of 20 twenty-four months. 21 Sec. 6. NEW SECTION . 510B.8D Pharmacy benefits manager 22 contracts —— spread pricing. 23 1. All contracts executed, amended, adjusted, or renewed 24 on or after July 1, 2025, that apply to prescription drug 25 benefits on or after January 1, 2026, between a pharmacy 26 benefits manager and a third-party payor, or between a person 27 and a third-party payor, shall include all of the following 28 requirements: 29 a. The pharmacy benefits manager shall use pass-through 30 pricing unless paragraph “b” applies. 31 b. The pharmacy benefits manager may use direct or indirect 32 spread pricing only if the difference between the amount the 33 third-party payor pays the pharmacy benefits manager for a 34 prescription drug and the amount the pharmacy benefits manager 35 -6- LSB 1492SV (3) 91 nls/ko 6/ 11

S.F. 383 reimburses the dispensing pharmacy or dispensing health care 1 provider for the prescription drug is passed through by the 2 pharmacy benefits manager to the person contracted to receive 3 third-party payor services. 4 c. Payments received by a pharmacy benefits manager for 5 services provided by the pharmacy benefits manager to a 6 third-party payor or to a pharmacy shall be used or distributed 7 pursuant to the pharmacy benefits manager’s contract with 8 the third-party payor or with the pharmacy, or as otherwise 9 required by law. 10 2. Unless otherwise prohibited by law, subsection 1 shall 11 supersede any contractual terms to the contrary in any contract 12 executed, amended, adjusted, or renewed on or after July 1, 13 2025, that applies to prescription drug benefits on or after 14 January 1, 2026, between a pharmacy benefits manager and a 15 third-party payor, or between a person and a third-party payor. 16 Sec. 7. NEW SECTION . 510B.8E Appeals and disputes. 17 1. A pharmacy benefits manager shall provide a reasonable 18 process to allow a pharmacy to appeal a reimbursement rate for 19 a specific prescription drug if the pharmacy benefits manager 20 violates either section 510B.8A or section 510B.8B. 21 2. The appeals process must include all of the following: 22 a. A dedicated telephone number at which a pharmacy may 23 contact the pharmacy benefits manager and speak directly with 24 an individual who is involved with the appeals process. 25 b. A dedicated electronic mail address or internet site for 26 the purpose of submitting an appeal directly to the pharmacy 27 benefits manager. 28 c. A period of no less than thirty business days after the 29 date of a pharmacy’s initial submission of a clean claim during 30 which the pharmacy may initiate an appeal. 31 3. The pharmacy benefits manger shall respond to an appeal 32 within seven business days after the date on which the pharmacy 33 benefits manager receives the appeal. 34 a. If the pharmacy benefits manager grants a pharmacy’s 35 -7- LSB 1492SV (3) 91 nls/ko 7/ 11

S.F. 383 appeal, the pharmacy benefits manager shall do all of the 1 following: 2 (1) Adjust the reimbursement rate of the prescription drug 3 that is the subject of the appeal and provide the national drug 4 code number that the adjustment is based on to the appealing 5 pharmacy. 6 (2) Reverse and resubmit the claim that is the subject of 7 the appeal. 8 (3) Make the adjustment pursuant to subparagraph (1) 9 applicable to all of the following: 10 (a) Each pharmacy that is under common ownership with the 11 pharmacy that submitted the appeal. 12 (b) Each pharmacy in the state that demonstrates the 13 inability to purchase the prescription drug for less than the 14 established reimbursement rate. 15 b. If the pharmacy benefits manager denies a pharmacy’s 16 appeal, the pharmacy may submit the denial of the appeal to the 17 commissioner for examination. 18 Sec. 8. APPLICABILITY. This Act applies to pharmacy 19 benefits managers that manage a prescription drug benefit in 20 the state on or after July 1, 2025. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to pharmacy benefits managers (PBMs), 25 pharmacies, and prescription drugs. 26 The bill prohibits a PBM from discriminating against 27 a pharmacy or a pharmacist (pharmacy) with regard to 28 participation, referral, reimbursement of a covered service, or 29 indemnification if a pharmacist acts within the scope of the 30 pharmacist’s license, as permitted under state law, and the 31 pharmacy is operating in accordance with all applicable laws 32 and rules. 33 Under the bill, where a pharmacy has agreed to participate 34 in a covered person’s (person’s) health benefit plan (plan), 35 -8- LSB 1492SV (3) 91 nls/ko 8/ 11

S.F. 383 a PBM shall not prohibit or limit the person from selecting 1 a pharmacy of their choice, or impose a monetary advantage 2 or penalty as described in the bill. A PBM shall not deny a 3 pharmacy the right to participate as a contract provider under 4 a plan if the pharmacy agrees to the terms and requirements 5 of the plan and the terms of reimbursement. A PBM shall not 6 impose upon a pharmacy, as a condition of participation in a 7 network, any course of study, accreditation, certification, 8 or credentialing different than those imposed by state 9 requirements and the rules adopted by the board of pharmacy. 10 A PBM shall not unreasonably designate a prescription drug 11 (prescription) as a specialty drug to prevent a person from 12 accessing the prescription, or to limit a person’s access 13 to the prescription from a pharmacy that is within the 14 person’s plan’s network. A person or pharmacy harmed by such 15 a violation may file a complaint with the commissioner of 16 insurance (commissioner). A PBM shall not require a person, as 17 a condition of payment or reimbursement, to purchase pharmacy 18 services exclusively through a mail order pharmacy. A PBM 19 shall not impose upon a person any payment or condition for 20 purchasing pharmacy services that is more costly or restrictive 21 than if such services were purchased from a mail order 22 pharmacy, or any other pharmacy. 23 If a third-party payor (payor) providing reimbursement to 24 persons for prescriptions restricts pharmacy participation, 25 the payor shall notify, in writing, all pharmacies within 26 the geographical coverage area of the plan, and offer the 27 pharmacies the opportunity to participate in the plan at least 28 60 days prior to the effective date of the restriction. All 29 pharmacies in the geographical coverage area are eligible 30 to participate under identical reimbursement terms. The 31 payor shall inform persons of the names and locations of all 32 pharmacies participating in the plan. A participating pharmacy 33 shall be entitled to announce the pharmacy’s participation to 34 the pharmacy’s customers. The commissioner shall not certify 35 -9- LSB 1492SV (3) 91 nls/ko 9/ 11

S.F. 383 any PBM or license an insurance producer not in compliance with 1 the bill. 2 A PBM shall not impose different cost-sharing or additional 3 fees on a person based on the pharmacy at which the person 4 fills a prescription order. A person’s cost-sharing for a 5 prescription shall be calculated at the point of sale based 6 on a price that is reduced by an amount equal to at least 100 7 percent of all rebates that have been received, or will be 8 received, by the health carrier or a PBM in connection with 9 the dispensing or administration of the prescription. Any 10 additional rebate in excess of the required cost-sharing shall 11 be passed on to the plan for the purpose of reducing premiums. 12 A PBM shall include any amount paid by a person, or on behalf 13 of a person, when calculating the person’s total contribution 14 toward the person’s cost-sharing. Any amount paid by a person 15 for a prescription shall be applied to any deductible imposed 16 on the person by the person’s plan in accordance with the 17 coverage documents. 18 The bill prohibits a PBM from reimbursing a pharmacy in an 19 amount less than the national average drug acquisition cost 20 or, if unavailable, the wholesale acquisition cost, for a 21 prescription on the date that the prescription is administered 22 or dispensed. A PBM also must reimburse the pharmacy a 23 professional dispensing fee in the amount of $10.60. A PBM 24 shall submit a quarterly report to the commissioner that 25 contains the information detailed in the bill, and publish such 26 report on the PBM’s public internet site as described in the 27 bill. 28 The bill requires all contracts executed, amended, adjusted, 29 or renewed on or after July 1, 2025, that are applicable to 30 prescription benefits on or after January 1, 2026, between 31 a PBM and a payor, or between a person and a payor, to use 32 a pass-through pricing model with an exception as detailed 33 in the bill, and to ensure that payments received by a PBM 34 for providing services to a payor or a pharmacy are used or 35 -10- LSB 1492SV (3) 91 nls/ko 10/ 11

S.F. 383 distributed pursuant to the PBM’s contract with the payor 1 or with the pharmacy, or as otherwise required by law. 2 “Pass-through pricing” and “spread pricing” are defined in the 3 bill. 4 The bill requires a PBM to provide a process for pharmacies 5 to appeal a reimbursement rate for a specific prescription. 6 The appeal process is detailed in the bill. If a PBM denies a 7 pharmacy’s appeal, the pharmacy may submit the denial to the 8 commissioner for examination. 9 The bill applies to pharmacy benefits managers that manage 10 a prescription drug benefit in the state on or after July 1, 11 2025. 12 -11- LSB 1492SV (3) 91 nls/ko 11/ 11