(Radio Iowa) – A coalition of business groups, labor unions and a major Iowa clinic is seeking to overturn a law that puts restrictions on companies called Pharmacy Benefit Managers that set the price of medications for people with insurance. Supporters of the law say it will ensure pharmacies are properly reimbursed for filling prescriptions and patients aren’t forced to use certain pharmacies. The Iowa Association of Business and Industry is leading a lawsuit that argues the law is unconstitutional because it forbids employers from telling employees how to save money on prescriptions.

The groups also argue the new regulations outlined in the Iowa law are pre-empted by federal law. Iowa Association of Business and Industry president Nicole Crain says the law will raise health care costs for businesses of all sizes by hundreds of millions of dollars.

Backers of the law say a required, nearly 11 dollar dispensing fee to small, independent pharmacies for each prescription filled will stop an avalanche of pharmacy closures. The coalition challenge the law says that fee will drive up costs and the law prevents insurance plans from directing patients to Iowa or online pharmacies that will not be required to charge that fee. The Iowa Bankers Benefit Plan, the Iowa Laborers District Council Health and Welfare Fund, Des Moines Orthopedic Surgeons and Adel-based Iowa Spring Manufacturing are also parties to the lawsuit.