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Lawmakers approve some regulations for Pharmacy Benefit Managers

DES MOINES — The last bill to clear the legislature this year gives Iowa’s insurance commissioner authority to collect more data about companies called pharmacy benefit managers.

Critics say P-B-Ms are driving small-town pharmacies out of business, while the industry says P-B-Ms are helping to control prescription drug costs. Pharmacy Benefit Managers are companies hired to administer prescription drug benefits provided by large employers, insurance companies and Medicare Part D. Two months ago, the Iowa House unanimously voted for a series of safeguards for pharmacies and consumers. This week, the Iowa Senate voted to scale some of that back.

For instance, Republican Senator Mike Klimesh of Spillville says the bill no longer ensures any Iowa pharmacy can apply to be part of networks that serve customers with prescription drug insurance.  “What’s left in the bill, the bulk of the bill is a regulatory framework giving the insurance commissioner more latitude for rulemaking, to start to gather additional information,” Klimesh said, “so it helps us in our policy crafting process in years to come.”

Representative Brian Best, a Republican  from Carroll, says more must be done to expose the secretive conduct of P-B-Ms.  “This is a situation where if we don’t do more than this, we are going to lose our pharmacies in small towns,” Best says. “Small town pharmacies are part of rural Iowa. In some blocks, it’s about all there is left sometimes and if we lose that, we’re losing everything.”

Senate Republican Leader Jack Whitver says a nationwide policy would be better, but congress has been unable to act, so lawmakers in states like Iowa are trying to come up with solutions. “You have the pharmacists on one hand. You have PhARMA on another, you have the PBMs, you have insurance companies, you have the employers and so to try to find a balance is what we’re trying to do, which is control drug prices, is very difficult,” Whitver says. “I think the bill we passed in the end will allow us to continue to work on that issue.”

According to the National Conference of State Legislatures, pharmacy benefit managers process about 75 percent of all prescriptions filled in the United States. All but four states have passed laws that regulate P-B-Ms in some fashion.

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