Iowa Governor Signs Bill Limiting PBM Practices
SF 383 prohibits PBMs from limiting patient choice of pharmacy, unfairly excluding pharmacies from networks, and forces them to reimburse pharmacies no less than what they pay affiliated pharmacies for the same drug.
Iowa Governor Kim Reynolds signed a bill on Wednesday that will impose restrictions on pharmacy benefit managers (PBMs) in an effort to address challenges that harm patients and independent pharmacies.1
The bill, Senate File (SF) 383, prohibits PBMs from limiting patient choice of pharmacy, unfairly excluding pharmacies from networks, imposing requirements beyond state regulations, and bans practices such as forcing mail-order use or improperly classifying specialty drugs to restrict access. Under the law, PBMs must reimburse pharmacies no less than what they pay affiliated pharmacies for the same drug. They are also required to pay retail pharmacies a professional dispensing fee per prescription.
“After extensive research and thoughtful conversations with employers and stakeholders on all sides of this complex issue, I made the decision to sign SF 383 in an effort to continue improving our health care system by bringing greater accountability to the role of PBMs,” Governor Reynolds wrote in a letter to Iowa Secretary Paul Pate.1 “In enacting this bill into law, Iowa joins Texas, Georgia, Indiana, and Montana that this year passed similar legislation to address this important issue along with several other states that have done so previously, bringing the total to 32 states.”
Iowa State Capitol | image credit: pabrady63
One of the most notable actions from those 32 states is Arkansas’ HB1150, which bans PBM ownership of pharmacy storefronts. Because CVS has said the law would force it to close 23 locations in the state within the next year, some skepticism surrounds SF 383 and how exactly it will impact access to prescription drugs.2
READ MORE: CVS, Express Scripts Sue to Overturn Arkansas Law Banning PBMs From Owning Pharmacies
“[T]his bill does not signify an end,” Reynold said.1 “The complexity and lack of verifiable data made signing this bill a difficult decision and my administration will closely monitor implementation to mitigate and ensure that any unintended consequences for private employers are addressed.”
In the bill, financial downfalls may be redistributed from rural pharmacies and be brought on by patients, employers, plan sponsors, PBMs, or other entities within the supply chain. And while Reynolds and her colleagues know more work is needed to facilitate the bill’s implementation, small Iowan pharmacies consider it a significant victory and it could be a key next-step for enacting federal-level PBM reform.
“For too long, PBMs have put profits over patients, contributing to the closure of more than 200 pharmacies in Iowa since 2014,” Kate Gainer, CEO of the Iowa Pharmacy Association, wrote in a release.4 “This law gives us the tools to level the playing field and protect access to care, especially in rural areas.”
Amid the 2 bills signed in Arkansas and Iowa, as well as 30 other states, more legislators have begun taking aim at PBMs. However, PBMs and their advocates claim these actions will have negative impacts on patients.
The country’s key PBM advocacy group, the Pharmaceutical Care Management Association (PCMA), recently expressed its concerns with Arkansas HB1150 and how it may impact patients. Filing a lawsuit against the state, PCMA expressed how unfavorable they believe bills like these can be.
“Our lawsuit aims to protect patients in Arkansas from the implementation of this dangerous, misguided policy,” PCMA wrote in a statement.3 “If implemented, the Arkansas legislation mandating forced closures of pharmacies would have a devastating impact on patient access to critical medications and pharmacy services.”
While bills like HB1150 and SF 383 have made an impact on how PBMs will operate in the future, federal legislators have yet to follow suit as pharmacists and pharmacy businesses continue to call for reform.
READ MORE: PBM Reform Necessary for Access to Medicare Part D Drugs
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