Tod Bowman.

For small, rural communities across Iowa, the local pharmacy is more than just a place to pick up prescriptions. It’s often a vital health care hub, a trusted source of advice, and a cornerstone of the local economy.

According to the Iowa Pharmacy Association, over 200 Iowa pharmacies closed their doors in the last decade, more than 30 in 2024 alone. The decline of pharmacies results in our rural communities facing a number of negative consequences: significantly fewer health care options, increased travel distances for essential medications, a diminished ability to access personalized care from trusted local pharmacists, and the loss of a vital business.

Gov. Kim Reynolds signed Senate File (SF) 383 into law on June 12, marking a significant turning point. The new law aims to reform the practices of Pharmacy Benefit Managers (PBMs).

PBMs are entities that negotiate drug prices and manage reimbursements between pharmacies and insurance companies.

Concerning PBM practices have often hindered rural pharmacies. The new law mandates fair reimbursement practices, protects patient choice, and eliminates varied co-pays based on where patients fill prescriptions.

Matt Osterhaus is a local pharmacist in Maquoketa, Iowa, and the former president of the Iowa Pharmacy Association. He emphasized how the reform will protect both pharmacies and patients.

“This law will prevent the PBMs from practicing spread pricing, a practice where PBMs inflate drug costs for employers while underpaying local pharmacies,” Osterhaus said. “This law is a major step toward keeping the infrastructure of rural health in Iowa solvent.”

Gov. Reynolds’ decision to sign SF 383 into law is a meaningful victory for independent pharmacies and the rural communities they serve across Iowa. The new law mandates fairness for our local pharmacies, ensuring they can continue to provide essential health care services and remain a vital part of their community.

Tod Bowman is a policy associate with the Center for Rural Affairs based out of his home office in Maquoketa, Iowa. Established in 1973, the Center for Rural Affairs is a private, nonprofit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.