Skip to site navigation Skip to main content Skip to footer content Skip to Site Search page Skip to People Search page

Alerts and Updates

Iowa Asks Eighth Circuit to Unblock Key Pharmacy Benefit Manager Reform Law Provisions

February 19, 2026

Iowa Asks Eighth Circuit to Unblock Key Pharmacy Benefit Manager Reform Law Provisions

February 19, 2026

Read below

Like PBM reform legislation across the country, the Eighth Circuit’s decision will impact industry stakeholders.

On February 13, 2026, the state of Iowa filed an appellate brief with the United States Court of Appeals for the Eighth Circuit, urging the court to lift a preliminary block (as imposed by the lower court) on parts of its pharmacy benefit manager (PBM) reform law—Senate File 383. Iowa argues that the federal district court erred in its interpretation of federal preemption and constitutional limits. 

This filing marks a critical moment in the ongoing litigation over state-level PBM reform, as Iowa seeks to reinstate enforcement of reforms temporarily enjoined by the court in order to protect independent pharmacies and curb unfair PBM practices.

SF 383 and the Preliminary Injunction

In June 2025, the Iowa Legislature enacted SF 383, a wide-ranging statute regulating PBMs, including provisions similar to other state PBM reform laws, such as:

  • 100 percent rebate pass-through to health plans/plan sponsors;
  • Minimum pharmacy reimbursement linked to acquisition cost plus a dispensing fee;
  • Ban on spread pricing and certain patient steering practices; and
  • Enhanced transparency, dispute resolution rights for pharmacies and reporting requirements.  

The law, enacted on July 1, 2025, was quickly challenged in the U.S. District Court for the Southern District of Iowa by a coalition of employers and benefit plan sponsors, who argued that parts of the law were preempted by the Employee Retirement Income Security Act (ERISA) and violated constitutional free speech protections. 

On July 21, 2025, the federal court granted a preliminary injunction blocking enforcement of several key provisions as applied to the plaintiffs and their PBMs, finding the provisions of SF 383 likely conflicted with ERISA and the First Amendment. 

Iowa’s Eighth Circuit Filing

In its February 13, 2026, filing with the Eighth Circuit, the state of Iowa is asking the appellate court to reverse or narrow the district court’s preliminary injunction, arguing that:

  • The blocked provisions are valid exercises of traditional state insurance and commercial regulation authority and do not intrude upon ERISA;  
  • The lower court misapplied the federal preemption doctrine (wherein federal law trumps conflicting state law) by treating certain PBM regulatory measures as impermissible “plan design” rules—even though they govern PBM conduct and disclosure practices outside of direct plan benefit structuring;
  • The court’s constitutional analysis compressed legitimate state regulatory aims (e.g., transparency, anti-steering protections) into a free speech violation, improperly curtailing the state’s ability to police unfair and deceptive PBM practices; and
  • Because the injunction affects only certain private plaintiffs, it has the inadvertent effect of creating uneven regulatory enforcement and undermines Iowa’s broader public policy objectives.

The state is effectively urging the Eighth Circuit to reinstate enforcement of the contested law while the case proceeds, arguing that the lower court’s reasoning was flawed both in law and in its interpretation of the interplay between state insurance regulation and federal employee benefits law.

Implications for Litigation and Compliance

Like PBM reform legislation across the country, the Eighth Circuit’s decision will impact industry stakeholders. For PBMs, Iowa’s filing signals the state’s commitment to defending its regulatory frameworks, which, if successful, triggers renewed PBM enforcement obligations in Iowa.

For independent pharmacies, a successful appeal reinstating SF 383 provisions could revitalize the law’s protections, including, for example, potential increased reimbursement, protection from PBM patient steering and enhanced dispute resolution rights.

We will continue to monitor this case and analyze the ruling and any other updates in future Alerts.

For More Information

If you have any questions about this Alert, please contact Jonathan L. Swichar, Bradley A. Wasser, Nikki Baniewicz, any of the attorneys in our Pharmacy Litigation Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.