Senate File 383: A step toward fairness for Iowa pharmacies

By State Rep. Jon Dunwell

Over the past decade, Iowa has lost more than 200 pharmacies, with over 30 closing in 2024 alone. Rural communities have been hit hardest, leaving many Iowans struggling to access essential medications. Pharmacists, the most accessible healthcare providers, are vital to both rural and urban communities. When the only pharmacy in a town shutters, the impact on residents is profound, threatening their health and well-being.

For too long, Pharmacy Benefit Managers (PBMs) have driven this crisis through abusive, anti-competitive practices. These middlemen negotiate drug prices but often reimburse pharmacies below the cost of acquisition, forcing closures and inflating prescription prices nationwide. PBM-driven pressures overwork and understaff pharmacies, leading to burnt-out staff, risks to public safety, and subpar care. Iowa’s community pharmacists deserve a level playing field to serve their neighbors effectively.

This week, the Iowa Legislature passed Senate File 383, a robust PBM reform bill to address these issues. The legislation introduces critical regulations to ensure fairness and transparency. It prohibits PBMs from discriminating against pharmacies operating within their licenses, removing patient choice through tactics like forced mail-order prescriptions or unnecessary specialty drug designations. It bans additional cost-sharing based on where patients fill prescriptions and eliminates spread pricing, where PBMs pocket the difference between what they pay pharmacies and charge insurers. All rebates must now return to employee plan sponsors, and patient payments must apply toward deductibles.

Additionally, the bill mandates that PBMs reimburse retail pharmacies (excluding large chains and mail-order-only entities) at the national or state average acquisition cost plus a $10.68 dispensing fee. Pharmacies can appeal inadequate reimbursements, and PBMs must report regularly to the Insurance Division for oversight. The bill also requires a study of Pharmacy Services Administrative Organizations and wholesalers, with a report due by January 1, 2026.

Senate File 383 brings transparency to a broken system, empowers patients to choose their providers, and ensures pharmacies are fairly compensated to keep their doors open. By prioritizing Iowa’s healthcare infrastructure, this bill keeps dollars in our communities rather than funneling profits to out-of-state corporations. It’s a vital step toward protecting access to care and ensuring Iowans receive the quality healthcare they deserve.