Iowa has enacted new legislation aimed at increasing transparency and limiting the influence of pharmacy benefit managers (PBMs) in the state’s prescription drug market. The law, Senate File 383, passed 36-14, responds to growing national concerns about PBM practices that critics say reduce competition and hurt independent pharmacies.

PBMs — which manage drug benefits for health plans — have been under scrutiny for steering patients to their own pharmacies, underpaying independents, and profiting from spread pricing. Iowa’s law restricts these practices by requiring equal reimbursement standards, banning patient steering, and mandating full rebate pass-through to health plans.

The law also boosts rural pharmacy protections by expanding network access, improving transparency, and strengthening pharmacists' ability to appeal PBM decisions. Over 30 rural Iowa pharmacies have closed in the past year, and advocates say the law could help reverse that trend.

However, a state analysis suggests the legislation could increase costs for Iowa’s self-funded health plan by up to $8.2 million annually. Business groups opposed the bill, warning of higher pharmacy service costs statewide.

Despite concerns, Governor Kim Reynolds signed the bill, calling it a “difficult” decision. She emphasized the need to monitor implementation and mitigate potential impacts on private employers.

Source: Healthcare Dive – Iowa passes law imposing tighter restrictions on PBMs by Susanna Vogel