(Des Moines, IA – Iowa Capital Dispatch) – The Iowa Senate passed a bill setting new standards for pharmacy benefit managers that lawmakers said will help keep rural pharmacies in business and lower the cost of prescription drugs. Senate File 383, passed 36-14, is the legislation passed through the committee process earlier this year limiting certain PBM business practices. Pharmacy benefit managers are companies that serve as the negotiator between drug manufacturers, pharmacies and health insurance companies for setting prescription drug costs. The legislation would set new regulations for PBMs, including requiring pharmacies to be reimbursed for the national or state average acquisition cost of a drug — a higher reimbursement rate than many pharmacies are currently receiving, according to several workers and owners of current rural pharmacies.

Earlier in the legislative session, pharmacists and supporters told lawmakers the bill would help Iowa pharmacies stay in business, linking the closure of many locally owned, rural pharmacies in recent years to PBM practices that favor mail-order prescription refills and certain pharmacy chains. The bill was amended by the Senate Monday to define “retail pharmacies” and “pharmacy chains.” The Senate amendment also makes some changes to the language about how rebates received by a PBM on drugs are returned to a health benefit plan to reduce insurance premiums.