The quiet drama unfolding in Iowa this summer brings into sharp focus the clash between state-level regulatory ambition and entrenched federal oversight. As of 24 June 2025, a coalition led by the Iowa Association of Business and Industry, together with insurers and employers, has filed a federal lawsuit to halt Senate File 383 – legislation designed to curb practices by pharmacy benefit managers (PBMs), effective 1 July 2025. The law seeks to prohibit PBMs from steering patients toward preferred pharmacies, under‑reimbursing pharmacies, or misrepresenting drugs as “specialty” to limit patient access, and even mandates specific contractual terms between PBMs, pharmacies, insurers, and employers.
Supporters of the law, including Governor Kim Reynolds, argue that these reforms are vital to rescuing rural pharmacies, many of which have shuttered under PBMs’ tight reimbursement models. The law includes measures like a minimum dispensing fee, designed to bolster small-town pharmacy viability. Yet opponents warn that the reforms fly in the face of the Employee Retirement Income Security Act and the First Amendment, potentially disrupting insurance operations and adding millions to business healthcare costs each year.
This legal standoff is emblematic of a broader national reckoning with PBM behaviour. A 2024 Federal Trade Commission report accused major PBMs of inflating US drug costs and weakening pharmacy networks; Express Scripts responded by suing the FTC over the findings. Other states, such as Arkansas and Louisiana, have enacted similar laws and faced lawsuits from major PBMs, underscoring the tug‑of‑war between state reforms and the multibillion‑dollar PBM industry.
At its core, this dispute raises essential questions about healthcare regulation: should states have authority to impose stringent controls on PBMs to protect local pharmacies, or do federal standards and free‑speech protections shield PBMs from such interventions? As the injunction request progresses through federal courts, the outcome may set a precedent for how states nationwide balance cost containment, pharmacy access, and regulatory control in the PBM landscape.
