Governor Kim Reynolds has signed a bill to regulate Pharmacy Benefit Managers.
PBMs negotiate with insurance companies, drug makers and pharmacies to set the price of medications for people with insurance coverage. Supporters say the bill will ensure pharmacies are properly reimbursed for filling prescriptions. Representative Brett Barker of Nevada, who is a pharmacist, says the regulations will stave off an “avalanche” of pharmacy closures.
“The day we passed it in the House there were pharmacists in the gallery shedding tears of joy,” Barker told Radio Iowa, “because it means that much for them to continue to serve their communities.”
Over 200 Iowa pharmacies have closed since 2014. More than 30 closed just last year. Barker said without the bill’s protections, many more were going to keep losing money filling prescriptions and go out of business.
“There were dozens of pharmacies holding on this session to see if we could get something done this year and luckily we were able to,” Barker said. “so the governor signing this bill has saved access to pharmacies in this state.”
Governor Reynolds said in a written statement that PBMs have had “outsized power” over which pharmacy patients may use and which medications they may receive. The new law forbids PBMs from forcing patients to use mail-order pharmacies and it requires a $10.68 dispensing fee for each prescription filled at small pharmacies.
Business groups say the law will add $340 million to the cost of private sector insurance plans next year and they urged the governor to veto thte bill. Bill backers say that hasn’t happened in other states with similar laws. Reynolds said her office will monitor how insurance premiums are affected and take steps to mitigate costs for private employers.