Senate Study Bill 1207 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON BOUSSELOT) A BILL FOR An Act relating to pharmacy benefits managers, pharmacies, and 1 prescription drugs. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2923XC (3) 91 nls/ko

S.F. _____ Section 1. Section 510B.1, Code 2025, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 11A. “Pass-through pricing” means a 3 model of prescription drug pricing in which payments made 4 by a third-party payor to a pharmacy benefits manager for 5 prescription drugs are equivalent to the payments the pharmacy 6 benefits manager makes to the dispensing pharmacy or dispensing 7 health care provider for the prescription drugs, including any 8 professional dispensing fee. 9 NEW SUBSECTION . 16A. “Pharmacy desert” means a geographic 10 area with a single pharmacy located at least thirty miles from 11 the nearest pharmacy. 12 NEW SUBSECTION . 21A. “Specialty drug” means a drug used 13 to treat chronic and complex or rare medical conditions and 14 that requires special handling or administration, provider care 15 coordination, or patient education that cannot be provided by a 16 nonspecialty pharmacy or pharmacist. 17 NEW SUBSECTION . 21B. “Spread pricing” means a pharmacy 18 benefits manager charges a third-party payor more for 19 prescription drugs dispensed to a covered person than the 20 amount the pharmacy benefits manager reimburses the pharmacy 21 for dispensing the prescription drugs to a covered person. 22 Sec. 2. NEW SECTION . 510B.4B Prohibited conduct —— mail 23 order pharmacies. 24 1. A pharmacy benefits manager shall not require a covered 25 person, as a condition of payment or reimbursement, to purchase 26 pharmacy services, including prescription drugs, exclusively 27 through a mail order pharmacy. 28 2. This section shall not apply to a specialty drug. 29 Sec. 3. Section 510B.8, Code 2025, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 3. One hundred percent of all rebates 32 received by a pharmacy benefits manager shall be passed through 33 to the health carrier or employer plan sponsor for the purpose 34 of reducing premiums. 35 -1- LSB 2923XC (3) 91 nls/ko 1/ 3

S.F. _____ Sec. 4. Section 510B.8B, Code 2025, is amended to read as 1 follows: 2 510B.8B Pharmacy benefits manager affiliates managers —— 3 reimbursement. 4 1. A pharmacy benefits manager shall not reimburse any 5 pharmacy located in the state in an amount less than the amount 6 that the pharmacy benefits manager reimburses a pharmacy 7 benefits manager affiliate for dispensing the same prescription 8 drug as dispensed by the pharmacy. The reimbursement amount 9 shall be calculated on a per unit basis based on the same 10 generic product identifier or generic code number. 11 2. For a prescription filled at a pharmacy with five or 12 less locations, a pharmacy benefits manager shall reimburse the 13 pharmacy or pharmacist a professional dispensing fee in the 14 amount of three dollars. 15 3. For a prescription filled at a pharmacy with six or more 16 locations, and that has any location located in a pharmacy 17 desert, a pharmacy benefits manager shall reimburse the 18 pharmacy located in a pharmacy desert a professional dispensing 19 fee in the amount of three dollars. 20 Sec. 5. NEW SECTION . 510B.8D Pharmacy benefits manager 21 contracts —— spread pricing. 22 All contracts executed, amended, adjusted, or renewed on or 23 after July 1, 2025, that apply to prescription drug benefits on 24 or after January 1, 2026, between a pharmacy benefits manager 25 and a third-party payor, or between a person and a third-party 26 payor, shall prohibit the practice of spread pricing. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill relates to pharmacy benefits managers, pharmacies, 31 and prescription drugs. 32 Under the bill, except for specialty drugs, a pharmacy 33 benefits manager (PBM) shall not require a covered person, 34 as a condition of payment or reimbursement, to purchase 35 -2- LSB 2923XC (3) 91 nls/ko 2/ 3

S.F. _____ pharmacy services, exclusively through a mail order pharmacy. 1 “Specialty drug” is defined in the bill. 2 Under the bill, 100 percent of all rebates received by a PBM 3 shall be passed through to the health carrier or employer plan 4 sponsor to reduce premiums. “Pass-through pricing” is defined 5 in the bill. 6 Under the bill, for a prescription filled at a pharmacy 7 with five or less locations, a PBM shall reimburse the 8 pharmacy or pharmacist a $3 professional dispensing fee. For a 9 prescription filled at a pharmacy with six or more locations, 10 and that has any location located in a pharmacy desert, a 11 PBM shall reimburse the pharmacy in the pharmacy desert a 12 professional dispensing fee of $3. “Pharmacy desert” is 13 defined in the bill. 14 Under the bill, all contracts executed, amended, adjusted, 15 or renewed on or after July 1, 2025, that apply to prescription 16 drug benefits on or after January 1, 2026, between a PBM and 17 a third-party payor, or between a person and a third-party 18 payor, shall prohibit the practice of spread pricing. “Spread 19 pricing” is defined in the bill. 20 -3- LSB 2923XC (3) 91 nls/ko 3/ 3