The Iowa Association of Business and Industry has served as the voice of Iowa business since our founding in 1903. ABI’s policies are developed annually by more than 300 business leaders and approved by the board of directors.
ABI works to serve our members and advance their interests in public policy. We do this through direct advocacy before the legislative and executive branches of state government, public education and in rare cases, litigation. ABI is the leading plaintiff in a lawsuit against the Iowa Insurance Commissioner to prevent the implementation of a pharmacy price control bill that was signed into law in 2025. How did we get to this point?
Since at least 2021, ABI has been providing public policy input for pharmacy benefit manager (PBM) reforms considered by Iowa policymakers. We supported some, opposed some and have been neutral on others. Our membership has guided ABI’s efforts, making sure Iowa’s businesses can continue offering affordable, high-quality health plans for their employees. Now ABI, at the direction of our board of directors, has filed suit against the Iowa Insurance Commissioner in federal court to prevent the implementation of a law — Senate File 383 passed during the 2025 Iowa legislative session.
First some background
ABI supports small, independent pharmacies. Many ABI member companies are in suburban and rural communities and rely on these pharmacies for services. We have provided testimony to Iowa House and Senate subcommittees multiple times declaring such support. Additionally, ABI supported an amendment in 2025 providing direct financial subsidies from our sponsored health plans to small and independent rural pharmacies (H-1302 to SF 383). ABI also advocated for legislation introduced in the Senate Commerce Committee, SSB 1207, which contained several elements of the bipartisan federal legislation on PBM reform that U.S. Senator Chuck Grassley has been working to pass for several years.
Had pharmacy advocates and policymakers stopped there, small independent pharmacies would now be receiving vital new support, but unfortunately events played out differently.
The new Iowa law goes further and intrudes on how employers can design their health plans and their employee health benefits in Iowa, making the Iowa law vastly different than what is in other states. The new law is extremely expensive because instead of limiting the subsidy of $10.68 per prescription to small, rural independent pharmacies, the law provides that subsidy to the state’s largest pharmacy by market share – Hy-Vee – while denying the subsidy to national pharmacy chains such as Costco, CVS, Walgreens and Walmart.
ABI members were especially disappointed in the provision of the legislation that would harm hardworking Iowans the most and restrict businesses’ free speech. Supporters of the law tried to prohibit employers from comparing pharmacy costs and telling employees where to go to limit their costs at the pharmacy counter.
Combined, these factors, and other provisions within the law, upend the way Iowa employers manage their health plans for the benefit of their hardworking employees. The result is estimated to cost Iowans more than $300 million annually, putting this at one of the most, if not the most, expensive health care mandates in state history. Not only will the new regulatory and compliance framework cost Iowa employers millions; the direct cost to their employees, throughout the state in increased prescriptions at their pharmacy will be even greater. Because of this, the Iowa Association of Business and Industry is the lead litigant in a lawsuit barring the law from implementation.
Current state
ABI filed a request for a temporary restraining order and then a preliminary injunction preventing implementation of the law. The U.S. District Court for the Southern District of Iowa delivered the injunction on July 21, 2025, finding the Iowa law was superseded by federal ERISA law that helps keep the rules for health care plans consistent across state lines. The District Court ruled the law also runs afoul of the constitutional guarantee of free speech between employers and employees. On behalf of the state of Iowa, the Iowa Insurance Commissioner has appealed to the 8th Circuit Court of Appeals on Sept. 12, 2025, and the case continues. As the case moves through the courts, ABI remains steadfast in preserving our employer members’ ability to provide affordable, effective health care plans for their employees. To learn more, visit the ABI website for a fact sheet about the law and how ABI is advocating for our members.
Nicole Crain is president of the Iowa Association of Business and Industry.
