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HF2384: Pharmacy Benefits Managers


Requires a Pharmacy Benefits Manager (PBM) to act in good faith and notify insurers of any ownership interests and conflicts by prohibiting unfair competition and deceptive practices. Exempts DHS, Iowa Medicaid and Iowa's children's health insurance plan (hawk-I), Medicaid managed care organizations (MCOs), Medicare Part D prescription drug plans, and multiple employer welfare arrangements from these changes.  Prohibits a PBM from contacting a covered person without the insurer's written permission. Continues to allow PBMs to require drug substitutions, but if the substituted drug is more expensive to the patient or insurer, the substitution can only be required for medical reasons that benefit the patient and must be prior-approved by the prescribing health care professional. PBMs are not allowed to make substitutions if the prescription prohibits substitution. Prohibits PBMs from adding charges to pharmacies for participating in the network (performance-based fees, network participation fees, claim processing fees, accreditation fees).  Prohibits charging a person (through copays or other cost sharing arrangements) more for a prescription than the pharmacy is reimbursed. Prohibits PBMs from stopping a pharmacist from telling a patient about (or filling a prescription for) a lower-cost drug. Includes restrictions on placing a drug on the Maximum Allowable Cost list (drug must be therapeutically and pharmaceutically equivalent in the most recent FDA approved drug manual, drug is not obsolete or temporarily unavailable, drug can be purchased at any pharmacy licensed in the state without limitations).  PBMs must make the Maximum Allowable Cost list available to all in-network pharmacies, update the list within seven days of a price increase of 10% or more (or a change in methodology),  and provide a reasonable process for in-network pharmacies to be promptly notified of changes to the list.  Prohibits a PBM from paying a pharmacy less for filling a prescription drug than it pays PBM affiliates. Defines "clean claims" and does not allow a price reduction after a clean claim has been submitted (except if fraudulent, found not to be a clean claim, or was a duplicate claim).  Makes PBMs subject to all insurance laws regarding prior authorization. Allows the Insurance Commissioner to adopt rules and enforce them (but does not require). Gives the Insurance Division emergency rule making authority.  Makes the provisions severable if there is a court challenge. Takes effect June 13, 2022. 

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Position: Track
Topic/Subject: Prescription Drugs

Last Modified: 08/05/2022

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