n the final days of the 2025 Iowa legislative session, business groups are asking lawmakers to rethink Senate File 383 because of its potential to increase health care costs for employers and employees.

The Iowa Association of Business and Industry, Iowa Business Council and National Federation of Independent Business are working together to advocate for a change to the bill before it has a chance to move further.

SF 383 is focused on pharmacy benefit manager reform and would set new regulations such as requiring pharmacies to be reimbursed for the national or state average acquisition cost of a drug, which is higher than the current reimbursement rate for many pharmacies. The business groups say the bill would increase costs to the state employee health plan by $7.8 million annually, according to the nonpartisan Legislative Services Agency.

The bill could also:

• Add $340 million in costs to private-sector health plans statewide.
• Raise costs by approximately $169 per insured Iowan, per year.

“This bill hasn’t yet passed the full Legislature — there’s still time to get it right,” ABI President Nicole Crain stated in a press release. “ABI members and Iowa businesses support policies that improve access to care. But this legislation simply shifts hundreds of millions of dollars in new costs to employers and working families.

The groups say this is the wrong time to increase business costs.

“The PBM bill, as currently drafted, will substantially increase costs for Iowa businesses and their employees,” IBC President Joe Murphy stated. “At a time when inflationary pressures from tariffs and other economic headwinds are bearing down on our state, we cannot afford to add further cost burdens through legislative action. We remain committed to a thoughtful, targeted approach to PBM reform — one that supports small, independent pharmacies serving Iowa.”

The business groups say there are proposal alternatives that do not create cost increases for employers and employees.

“Main Street businesses are facing the same challenges as our fellow small pharmacy owners,” said Matt Everson, NFIB’s Iowa state director. “This bill in its current form will provide relief for small pharmacies but increase the cost of doing business for every other business in that community. Reform is needed, but not on the backs of putting other Main Street businesses out of business.”