Iowa (RI) — A coalition of businesses, 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 the lawsuit that argues the law is unconstitutional because it forbids employers from telling employees how to save money on prescriptions. Nicole Crain is the association’s president.
The coalition is asking a judge to issue an order that temporarily blocks the law from going into effect.
Crain says the law would raise health care costs for Iowa businesses of all sizes by hundreds of millions of dollars. The groups argue the new regulations outlined in the Iowa law also are preempted by federal law.
That federal law regulates all health insurance plans that are provided by private employers. 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.
Backers of the law say Pharmacy Benefit Managers are forcing independent pharmacies to fill prescriptions at a loss, and the nearly $11 dispensing fee that will be paid to small pharmacies will stop an avalanche of pharmacy closures.
