Call for a Code Blue

Iowa Lawmakers Must Act to Resuscitate Pharmacies

Photo by Luis Melendez on Unsplash

If you've never used a prescription medicine, or expect you'll ever need one, this column doesn't apply to you. But for everyone else, this issue should command your urgent attention.

It's an issue imposing opaque constraints on your buying power as a health consumer. It also extorting pharmacists who lose money on 40%-50%% of the prescriptions they write. Finally, it's a life or death issue for local businesses as well as Iowans who skip on their prescription medicine to save money. The stakes are high.

But first we must follow the money trail.

What began in the 1960s as a strategy to help health insurers contain the cost of drugs has morphed into a multi-million power grab that's holding pharmacies hostage. Pharmacy benefit managers (PBMs), the third parties that negotiate with drug manufacturers and pharmacies on behalf of insurance providers, are leveraging their market power to increase profits and rack up fees in exchange for including pharmacies in your insurance company's preferred networks.

Iowa lawmakers have been grappling with the issue of PBM reform for at least 15 years, and PBM lobbyists have been eating their lunch. Meanwhile, 31 Iowa pharmacies closed in the past year; about half in rural communities and half in urban. A total of 150+ Iowa pharmacies have shut their doors in the past decade. More say they'll be driven out of business soon.

What is being done?

The Harms of Concentrated Market Power

This crisis isn't confined to Iowa. Independent pharmacies across the U.S. are forced by PBMs to accept reimbursements below their costs. Three companies: Optum Rx, CVS Caremark, and Express Scripts control about 80% of the market. To consolidate their power, PBMs have vertically and horizontally integrated with health insurers; for instance, CVS has a retail pharmacy and other PBMs operate mail order and specialty pharmacies. This allows them to coerce consumers into filling prescriptions at PBM-owned pharmacies, instead of preferred local pharmacies.

A 2020 Supreme Court decision allowed states to regulate PBMs. At least 24 states, including West Virginia, Kentucky, Tennessee, Arkansas, and Indiana, have passed legislation reining in PBM abuses. In 2022, the Iowa legislature took the initial step of passing legislation to bring PBM oversight under the purview of the Iowa Department of Insurance. This protects pharmacists who file complaints from retaliation. It also enables Iowa's insurance commissioner the authority to investigate these complaints and review PBM pricing.

But more reform is needed. In March 2025, the House passed legislation through committee, but has not held floor debate. Last week, the Senate passed SF 383, and sent it to the House.

How Healthy is Your Pharmacy?

Rep. Shannon Lundgren R-Peosta sponsored a PBM bill in 2024, spurred by pharmacy closures in Dubuque County. The bill stalled in the Senate. During the 2025 debate, the bill's floor manager Sen. Mike Klimesh, R-Spillville, shared the loss of four pharmacies in his district alone. Klimesh summed up the legislative remedies passed outside of Iowa, including:

· 36 states: Prohibiting PBMs from limiting in-network pharmacist choices,

· 32 states: Prohibiting required mail-order fulfillment,

· 11 states: Addressing minimum reimbursement standards, and

· Seven states: Creating a PBM appeals process.

Lobbyists argued that reforms would raise costs for patients and insurers. However, the Iowa Pharmacy Association reports insurance premiums haven't increased in states with these reforms.

Photo by National Cancer Institute on Unsplash

Local pharmacies aren't simply a relic of bygone days, like corner full-service gas stations or five-and-dime stores. Mail order pharmacies aren't the solution for rural or inner city residents, especially for pain medications, antivirals, or antibiotics. Insulin and other medications lose their effectiveness delivered by trucks without air conditioning.

Furthermore, individuals with chronic conditions or life-threatening cancer diagnoses rely on a face-to-face relationship with their pharmacists to discuss side effects and dosages.

"We always tried to support our local independent pharmacist, but when my husband changed jobs, and therefore our insurance coverage, we had to use a large-chain pharmacy if we wanted our prescriptions covered," my neighbor Lorna says. "If we order by phone through Express Scripts, we're mailed a 3-month supply for free. If we fill the same prescription somewhere else, we get a one-month supply and pay more. But a 3-month supply is wasteful if the drug doesn't work, or you need a different dosage. It's almost impossible to cancel it. Our local pharmacists know us – what meds we need, and our family’s struggle with cancer and chemo side effects. They seem to genuinely care."

Can't Wait for Federal Leadership

A PBM bill passed the U.S. House in 2023, but we can't depend on the Federal government to step into the breach. When Sen. Grassley held a town hall meeting in Boone last year, I asked, "Can you suggest one issue Congress could pass on a bipartisan basis?"

He replied, "Pharmacy benefit manager reform is a bipartisan concern."

PBM reforms were attached to the omnibus government funding package last November. But on December 19, Elon Musk and Donald Trump derailed the legislation, insisting that the House pass a different bill with a provision on raising the debt ceiling. PBM reforms were jettisoned. But Federal law is needed to reform PBM abuses in Medicare, a major source of prescriptions filled at independent pharmacies.

The Federal Trade Commission had been building a case against the three largest PBMs, Caremark Rx, Express Scripts and Optum RX, for conspiring to inflate the price of insulin. Now, under Trump, the two Democrats on the five-member Commission are contesting their firings, and it's unlikely this antitrust prosecution of PBMs will be pursued soon, if at all.

Greatest Good for Greatest Number of People?

Legislative grandstanding has sucked most of the oxygen out of the state Capitol this session. Here are some of our legislators' divisive priorities:

· Passage of the Baby Olivia bill for grades 5-12 (but they lifted the mandate for schools to teach about HPVs and the vaccine or AIDS in the sex education curriculum in 2024).

· Gov. Reynolds's signature of a bill into law, lowering the minimum age for buying or carrying a handgun to 18 from 21.

· Iowa legislators also met the moment of the current measles outbreak by passing a law requiring schools to advise parents regarding exemptions from childhood vaccines.

· The Governor signed a bill allowing a board member of an Iowa charter school to live outside of state. Why?

· Gov. Reynolds rushed to sign a bill into law removing gender identity as a protected class from a state law prohibiting discrimination. A total of 2,000 Iowans protested at the Statehouse.

Legislators still are struggling to pass a budget, as the per diem benefits ran out on May 2. So far, a bill affecting all Iowans – the failing health of Iowa pharmacies, and Iowans' fair and transparent access to prescription drugs – has been left twisting in the wind. Passing this law won't cure the issue of vertically and horizontally integrated health insurance companies. But it could keep pharmacies on life support while more is done.

What are our priorities as a state, and as Iowans? Surely access to pharmacies and reasonably priced drugs are made-to-order quality of life prescriptions for growing our state and attracting new residents? Without it, the pharmacy fallout worsens the prognosis for a state like Iowa already facing health care disparities, and the creation of healthcare access deserts.

Once a pharmacy closes, it won't reopen. The neighboring town 10 miles north, population 759, lost its pharmacy about six years ago. The pharmacy in the neighboring town 10 miles south is hanging on, with an owner/pharmacist well past retirement age staying on to serve the town's 2,000 residents. The day it closes will be a bitter pill to swallow.

Iowans' best home remedy is contact House representatives, and insist on passage of HF852 PBM legislation. Tell them it's a medical emergency.

Photo by Bradley Andrews on Unsplash

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