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Senate committee advances bill to allow reverse auction for state employee PBM services
Summary
The Iowa Senate Health and Human Services Committee voted to advance Senate Study Bill 1017, which would authorize a reverse auction for pharmacy benefit manager (PBM) services for the state employee health plan; committee members discussed fiscal uncertainty and assurances that the state's formulary could be preserved in any procurement.
Senate Study Bill 1017, authorizing the state to conduct a reverse auction for pharmacy benefit manager services for the state employees' health plan, was advanced by the Iowa Senate Health and Human Services Committee on a committee vote after consideration of an amendment that narrowed the bill's scope.
Supporters said the bill would let the Department of Administrative Services (DAS) procure PBM services through a reverse-auction platform. "Senate study bill 10 17, is a bill, authorizing the state of Iowa to conduct a reverse auction for PBM services, as part of the health insurance plan provided to state employees," sponsor Senator Clemens said during opening remarks.
The committee adopted a strike-all amendment (amendment 237) that aligns the bill with DAS's current procurement process, removes private-sector health plans from the bill's scope, and sets an effective date for state employee benefits under the new arrangement. After the amendment passed, Clemens moved the bill as amended and the committee advanced it to the calendar as a committee bill.
During discussion, members asked whether a fiscal note or estimated costs for the procurement were available. Senator Petersen asked whether costs had been determined; Clemens said DAS is still assessing costs and "the costs are still, unclear yet as to what it's gonna be." Clemens told the committee that DAS intends to hire a platform company to operate the reverse-auction technology and that "no additional FTEs were brought to my attention as part of doing the process." Clemens also said DAS "has the ability to take that exact same formulary and use that in the reverse auction process," adding, "the covered lives under the state's plan should see no change at all in the prescription drugs that are currently covered by the state's formulary moving forward."
The committee record does not include a roll-call tally for the final committee advancement; the bill was reported out to the floor as a committee bill under the committee's rules.
Notes and next steps: The bill advances to the Senate calendar. Committee discussion identified outstanding fiscal questions about the cost of the auction platform and a reliance on DAS to preserve the state's formulary; no formal fiscal estimate was provided during the hearing.
