DES MOINES, Iowa — Those arguing in favor and against the bill reforming Pharmacy Benefit Manager practices in Iowa are calling on the Governor for action.

Pharmacy Benefit Managers (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.

Pharmacists have supported this bill during the session because they say it will ensure they are paid at fair rates, resulting in them not having to close their doors.

Last year was a historic year for pharmacy closures in Iowa, with another 30 of them. Many pharmacies told WHO 13 News this was the result of corrupt practices by PBMs, mainly not being reimbursed at fair rates.

Pharmacists and pharmacy owners have advocated for similar reform legislation for the past three years, but were unsuccessful in getting it debated in the state senate. This year, the bill passed the legislature and now waits on the Governor’s approval.

However, when the bill was sent to the state’s executive branch, key corporate players voiced their concerns and urged the Governor to veto the bill. This included companies like the Iowa Association of Business and Industry (ABI), the Iowa Bankers Association (IBA), the Iowa Business Council, and the National Federation of Independent Business (NFIB).

They claimed the bill would negatively impact Iowans by costing them around $340 million annually.

In a statement sent to WHO 13 News, the Iowa Association of Business and Industry shared how they reached their data:

“To determine the impact of this bill, we used data publicly available from the Centers for Medicare and Medicaid Services (CMS) and the National Average Drug Acquisition Cost (NADAC), along with the $10.68 dispensing fee in the bill. Here is a breakdown:

1. The provision that contains the dispensing fee when paid to independent pharmacies and Iowa’s largest pharmacy provider will cost $114,250,00 per year.

2. Allowing any pharmacy to handle specialty drugs that require unique handling,, and administration eliminates the ability of employers to band together and get volume discounting on these drugs that now exists.  This provision, which does not benefit small independent pharmacies will cost $135,750,000 per year.

3. A provision that allows drug makers to provide copay assistance to drug purchasers pushes the costs from drug purchasers onto the health plans paid for by employee premiums.  This provision does not benefit small independent pharmacies and will cost $66,250,00 per year.

4. The bill contains a new process that allows pharmacies to change the reimbursement they get for drugs if they can show that their main wholesaler charges them more for a drug than had been established in the law. This provision will cost $23,500,000 per year.

Taken together, these four provisions create $339,750,000 in new costs of pharmacy care in Iowa.”

-Kelsey O’Connor, Marketing & Communications Director for the Iowa Association of Business and Industry

However, several small independent pharmacies in Central Iowa have previously told WHO 13 News that this bill would help them because it would ban PBMs from paying pharmacies less money than it costs for the pharmacy to purchase drugs and distribute prescriptions. This includes pharmacies in Oskaloosa, Minden, Colfax, and Eagle Grove. They say this unfair reimbursement rate has been the primary cause of increasing pharmacy closures in Iowa.

Brad Magg, the owner of the Spring City Pharmacy in Colfax, Iowa disagrees with the Iowa Association of Business and Industry.

He said, “Every state that’s passed legislation like this has seen their health insurance cost and prescription drug cost decrease, so for them to keep saying these astronomical numbers for what it’s going to cost, they’re not true. And they keep changing. Every time they say numbers, they’re different. The bill hasn’t changed.”

Magg said Spring City Pharmacy will be closed in six to eight weeks if the bill doesn’t become law.

The future of the bill is ultimately up to the state’s executive branch.

Governor Kim Reynolds has not indicated whether she will sign the bill into law or veto it. WHO 13 News has reached out to her office, but hasn’t heard back. She has until June 11th to sign the bill.