SSB 1207 (LSB 2923XC (3) 91)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON BOUSSELOT)

A BILL FOR

An Act relating to pharmacy benefits managers, pharmacies, and prescription drugs.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 510B.1, Code 2025, is amended by adding the following new subsections:
   NEW SUBSECTION.  11A.  “Pass-through pricing” means a model of prescription drug pricing in which payments made by a third-party payor to a pharmacy benefits manager for prescription drugs are equivalent to the payments the pharmacy benefits manager makes to the dispensing pharmacy or dispensing health care provider for the prescription drugs, including any professional dispensing fee.
   NEW SUBSECTION.  16A.  “Pharmacy desert” means a geographic area with a single pharmacy located at least thirty miles from the nearest pharmacy.
   NEW SUBSECTION.  21A.  “Specialty drug” means a drug used to treat chronic and complex or rare medical conditions and that requires special handling or administration, provider care coordination, or patient education that cannot be provided by a nonspecialty pharmacy or pharmacist.
   NEW SUBSECTION.  21B.  “Spread pricing” means a pharmacy benefits manager charges a third-party payor more for prescription drugs dispensed to a covered person than the amount the pharmacy benefits manager reimburses the pharmacy for dispensing the prescription drugs to a covered person.
    Sec. 2.  NEW SECTION.  510B.4B  Prohibited conduct —— mail order pharmacies.
   1.  A pharmacy benefits manager shall not require a covered person, as a condition of payment or reimbursement, to purchase pharmacy services, including prescription drugs, exclusively through a mail order pharmacy.
   2.  This section shall not apply to a specialty drug.
    Sec. 3.  Section 510B.8, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  One hundred percent of all rebates received by a pharmacy benefits manager shall be passed through to the health carrier or employer plan sponsor for the purpose of reducing premiums.
    Sec. 4.  Section 510B.8B, Code 2025, is amended to read as follows:
   510B.8B  Pharmacy benefits manager affiliates managers —— reimbursement.
   1.  A pharmacy benefits manager shall not reimburse any pharmacy located in the state in an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy benefits manager affiliate for dispensing the same prescription drug as dispensed by the pharmacy. The reimbursement amount shall be calculated on a per unit basis based on the same generic product identifier or generic code number.
   2.  For a prescription filled at a pharmacy with five or less locations, a pharmacy benefits manager shall reimburse the pharmacy or pharmacist a professional dispensing fee in the amount of three dollars.
   3.  For a prescription filled at a pharmacy with six or more locations, and that has any location located in a pharmacy desert, a pharmacy benefits manager shall reimburse the pharmacy located in a pharmacy desert a professional dispensing fee in the amount of three dollars. 
    Sec. 5.  NEW SECTION.  510B.8D  Pharmacy benefits manager contracts —— spread pricing.
   All contracts executed, amended, adjusted, or renewed on or after July 1, 2025, that apply to prescription drug benefits on or after January 1, 2026, between a pharmacy benefits manager and a third-party payor, or between a person and a third-party payor, shall prohibit the practice of spread pricing.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to pharmacy benefits managers, pharmacies, and prescription drugs.
   Under the bill, except for specialty drugs, a pharmacy benefits manager (PBM) shall not require a covered person, as a condition of payment or reimbursement, to purchase pharmacy services, exclusively through a mail order pharmacy. “Specialty drug” is defined in the bill.
   Under the bill, 100 percent of all rebates received by a PBM shall be passed through to the health carrier or employer plan sponsor to reduce premiums. “Pass-through pricing” is defined in the bill.
   Under the bill, for a prescription filled at a pharmacy with five or less locations, a PBM shall reimburse the pharmacy or pharmacist a $3 professional dispensing fee. For a prescription filled at a pharmacy with six or more locations, and that has any location located in a pharmacy desert, a PBM shall reimburse the pharmacy in the pharmacy desert a professional dispensing fee of $3. “Pharmacy desert” is defined in the bill.
   Under the bill, all contracts executed, amended, adjusted, or renewed on or after July 1, 2025, that apply to prescription drug benefits on or after January 1, 2026, between a PBM and a third-party payor, or between a person and a third-party payor, shall prohibit the practice of spread pricing. “Spread pricing” is defined in the bill.