13-05-2025
Pharmacy Benefit Managers reform bill heads to the Governor
DES MOINES, Iowa — The bill making changes to policies by pharmacy benefit managers (PBMs) is headed to Governor Kim Reynolds' desk.
Over the last three years, pharmacies across the state have advocated for a bill that would reform PBM practices. However, the bills have been unsuccessful at passing the Iowa legislature until Monday.
PBMs are the middlemen between pharmacies and insurance companies. They determine the total drug costs for insurers, shape patients' access to medications, and determine how much pharmacies are paid.
Over the last decade, 200 pharmacies in the state have closed, according to the Iowa Pharmacy Association (IPA). 2024 was a historic year for pharmacy closures, with more than 30. An estimated 955,000 Iowans have been affected by last year's closures.
Pharmacists across the state have been voicing concern over corrupt PBM policies. They say these closures are largely the result of PBM practices, including not being reimbursed at fair rates. PBMs often pay pharmacies less money than it costs for the pharmacy to purchase drugs and distribute prescriptions.
This was the case for pharmacies in Oskaloosa, Minden, Colfax, and Eagle Grove.
The legislation proposed this session would require PBMs to reimburse pharmacies their cost and enable patients to choose the pharmacy they want to receive care from.
Critics of the bill say it will cause premiums to increase. However, similar legislation has been passed in several other states across the country, and data collected in these states does not suggest an increase in the cost of premiums.
The bill was on the Iowa House's debate schedule on Monday, and was likely the legislation's last chance to pass this session.
As a result, over 100 pharmacists and community members went to the Capitol Monday morning to show their support for the bill. Many were optimistic at first, but an amendment filed early Monday morning worried pharmacists in the Capitol's rotunda.
The amendment was proposed by State Representative Bill Gustoff of District 40. He provided this statement to WHO 13 News on his proposal:
'The purpose of my amendment was to direct the dispensing fees of SF 383 to those pharmacies that advocates of the bill say they want to help—small, independent pharmacies and those serving so-called 'pharmacy deserts.' The amendment would generously define small and independent pharmacies as having annual revenue below $250 million without regard to its location, and identify those serving rural areas as being at least 10 miles from any other pharmacy without regard to the pharmacy's size. It would do all of that while also retaining the essential PBM reform elements of SF 383. This amendment would have ensured support for true small businesses without saddling all Iowans with higher costs.'
State Representative Bill Gustoff, (R) District 40, Polk County
State Representative Brett Barker of District 51 is also a pharmacist. He opposed the amendment and said it's detrimental to pharmacies in Iowa.
'It guts the bill. It strikes the core provisions. It actually is a reimbursement [decrease] on your smallest pharmacies, so it's something that absolutely does not help small pharmacies. It would be a step backwards from current law and I'm absolutely advocating against it,' he said.
Pharmacists in attendance, like Heidi Van Buren, also voiced concern. She said PBM reform is necessary to keep her pharmacy open.
'I feel like I'm carrying a rock going into a sword fight,' she said. 'If I sign the current contract that [a PBM] has sent to us, my pharmacy will be closed within months.'
Ultimately, Gustoff withdrew his amendment later in the day, and the House voted in favor of the PBM reform bill with 75 votes to 15.
Barker provided WHO 13 News with this updated statement after the bill passed:
'The abusive, anti-competitive practices of PBMs have created an epidemic of pharmacy closures and rising prescription drug prices nationwide. With the passage of SF383, Iowa will take a large step to catch back up with states across the country who have taken a leading role in reforming a broken system. This bill provides transparency in an opaque system, empowers patients to choose their healthcare provider, requires that the dollars in the system benefit patients and employers, and ensures that pharmacies can keep their doors open by reimbursing what it costs to dispense prescriptions to Iowans.'
-State Representative Brett Barker, (R) District 51, Neveda, Maxwell, Huxley
The Iowa Pharmacy Association praised the Iowa House for passing the bill.
'Leadership in the House to champion Senate File 383 across the finish line is so impactful to not only pharmacists across the state but ultimately the patients that pharmacists serve. This is a historic moment in Iowa to join other states that have passed meaningful PBM reform,' said IPA CEO Kate Gainer.
Gainer announced she will be stepping down as CEO later this year. More information on that can be found here.
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