Health Plan Sponsors Sue Iowa Over Contract Pharmacy Law

A consortium of Iowa business groups is suing the state over a law that bans employee-sponsored plans and pharmacy benefit managers from adopting business practices said to discriminate against independent pharmacies.

The Iowa Association of Business and Industry, along with four other business groups, filed a complaint in the US District Court for the Southern District of Iowa on Monday, alleging Iowa’s newly enacted SF 383 violated the plaintiffs’ First Amendment protections and was preempted by the federal Employee Retirement Income Security Act.

The law, signed June 11, would restrict PBMs, and by extension entities such as plan sponsors, from ...