Idaho
New Idaho law to regulate pharmacy benefit managers. Will it reduce prescription drug costs? • Idaho Capital Sun
In January, a new Idaho law will take effect requiring reform of business practices by pharmacy middlemen — in search of tamping down prescription drug costs.
The new law targets pharmacy benefit managers, known as PBMs, which are essentially middlemen in the process of delivering pharmaceutical drugs to patients. They are meant to save costs by working with health insurance companies, pharmacies, drug manufacturers and others.
But recently, PBMs have been under scrutiny. A recent report by federal regulators said PBMs drive up costs. U.S. Sen. Mike Crapo, R-Idaho, has pushed for federal PBM reform that has stalled in Congress.
Idaho’s new law, passed through House Bill 596 in 2024, mandates more transparency from PBMs, bans some of their practices and — hopefully — saves money on drug costs for consumers.
“Pharmacy benefit managers (were) to make sure there wasn’t misuse from the pharmacist to the patient and the providers prescribing. However, that has been completely perverted into just a business that just is able to harvest money without showing any kind of transparency there,” bill sponsor Rep. Jordan Redman, R-Coeur d’Alene, told the Idaho Capital Sun in an interview. “And that’s what’s driven to the exorbitant cost of pharmaceuticals throughout the entire nation.”
But an industry group representing PBMs that opposed the bill says the law will only drive up prescription costs even more.
“If there’s legislation that’s going to lower the cost for the payer and the patient, then we’re going to be for it. But if you’re going to have legislation that, at the end of the day, is going to increase what patients pay at the counter for their drugs, or increase their premiums, of course we’re going to oppose that. Because that’s not the direction we should be moving,” Pharmaceutical Care Management Association Assistant Vice President Bill Head said in an interview.
Tasked with implementing the law, the Idaho Department of Insurance is gearing up by hiring a new employee and seeking a contractor. That’s because the agency, which regulates insurers, doesn’t have much expertise in PBMs, insurance department Market Oversight Bureau Chief Shannon Hohl told the Sun in an interview.
Why are PBMs in the spotlight?
In July, the Federal Trade Commission released a report saying that PBMs are driving out competition in the pharmacy sector and appear to be increasing prices in the process, the Ohio Capital Journal reported.
The three biggest PBMs together are handling nearly 80% of prescription-drug transactions on behalf of insured Americans, the FTC report said. The largest six PBMs manage nearly 95% of all such prescriptions in the United States, the report said.
The president of the Pharmaceutical Care Management Association, which represents PBMs, at the time said that the FTC had treated the PBM industry unfairly.
Following that report, the state of Vermont filed a lawsuit against PBMs — part of a broader trend of states suing PBMs as part of efforts to lower prescription drug costs, Stateline reported.
In Congress, Crapo has pushed for federal PBM reform. Last year, two bills seeking PBM reform cleared the Senate Committee on Finance, but they haven’t advanced further.
“There has been no further movement on our PBM bill, but we are still looking for ways to get it over the finish line,” Crapo’s communications director, Amanda Critchfield, told the Sun in an email.
Critchfield said Idaho’s bill shares many of the federal legislation’s goals: “to enhance PBM oversight and transparency, strengthen Americans’ access to the pharmacies of their choice, and combat harmful practices that undermine market competition and drive up prescription drug costs.”
Redman told the Sun he worked with Crapo’s office on his Idaho bill. But Critchfield said Crapo was not involved in the Idaho bill.
“Our office is in contact with state legislators regularly and communicate on shared problems at the state and federal level, but Senator Crapo was not involved in the drafting of the state legislation,” Critchfield said in a statement.
What does the new Idaho law do?
The Idaho law requires a range of reporting — publicly and to health care entities — and bans and requires certain practices starting Jan. 1, 2025.
Here’s some of what the law will do.
PBMs licensed in Idaho must report the following to the Department of Insurance by Jan. 1:
- The difference between amounts PBMs pay to each pharmacy, on behalf of insurance plans;
- Reasons why any drugs are moved or reassigned formulary tiers with higher costs, copayment, coinsurance, deductibles or lower reimbursement to pharmacies; and
- Differences in reimbursement, fees or other price affiliation that PBMs that own, control or are affiliated with a pharmacy provide to other pharmacies.
The PBMs must:
- Pass through 100% of manufacturer rebates to PBMs, including payments and discounts;
- Include “network adequacy requirements” at or above Medicare Part D standards, including not limiting a network to only affiliated pharmacies or requiring mail-in prescriptions, “unless the prescription drug cannot be acquired at any retail pharmacy in the” PBMs’ “network for the covered person’s pharmacy benefits plan or program.”
To each health insurance plan, payer, and pharmacy that a PBM works with, PBMs must fully disclose:
- Cost, price and reimbursement of prescription drugs;
- Fees, markups and discounts charged or imposed by PBMs; and
- All rebates, discounts, administration fee or other payment or credits PBMs receive from drug manufacturers.
And the law bans “spread pricing,” defined as a practice in which PBMs charge pharmacy benefit plans “a different amount for pharmacist services than the amount the (PBM) reimburses a pharmacy.”
Why PBMs, insurers say Idaho’s new law will drive up prescription costs.
Though the bill’s fiscal impact didn’t estimate consumer drug cost savings, Redman says it’s likely patients will be passed down savings to the tune of hundreds of millions.
And he was skeptical about health industry projections that the law would raise costs, noting that there’s often common ownership between insurance companies and PBMs.
“When they’re being forced to provide more data and transparency, as well as pass through that rebate to the patient that is a profit generator for them, they’re going to be unhappy with that, right?” Redman said. “So to say that it’s just a misrepresentation is probably putting it lightly.”
Some of the bill’s provisions might cost the state of Idaho almost $11 million in drug expenses in the first year, and that would grow to $126 million over the next decade, the Pharmaceutical Care Management Association estimates.
“The proposed Idaho legislation will seriously undermine the ability of PBMs to control drug costs and manage their pharmacy networks, and as a result drug spending in Idaho will soar,” the association said, adding that its projection factored in the bill’s provisions on restricting using preferred pharmacy networks, mail-in pharmacies and mandating a dispensing fee.
But the association says that PBMs, over 10 years, will save Idahoans $5.2 billion in all insurance markets. Over 1.6 million Idahoans are covered by PBMs, the association estimates.
Head said no state PBM law has reduced drug costs for consumers. He said Idaho’s bill went “much further than what we typically see in other states.”
Head says the Pharmaceutical Care Management Association, which he said represents over a dozen PBMs, doesn’t oppose transparency. But he questioned the focus on PBMs.
“The focus on prescription drugs in general is the right focus. But I think it’s incredibly short sighted to think that just looking at one entity in the supply chain. And by the way, we have no impact on what pharma charges for a drug,” Head said. “… All we do is try to negotiate them to get a lower cost for the payer.”
Redman, who owns several pharmacies, said he got involved after seeing how PBM practices affected his businesses, and he said he consulted rural pharmacists across the state. In legislative debate, Redman said he disclosed his ownership of pharmacies and said his first-hand experience was helpful.
“I think the beauty of being a citizen Legislature, from folks from all walks of life, … and a part-time Legislature, is that we can kind of come up with things we see in our direct sphere, or what constituents are reaching out to us about,” Redman told the Sun. “… If you’re somewhat of a subject matter expert in a field, you probably have more knowledge and you’re able to inform the whole body better than if you didn’t. It’s the same we see with … cattlemen or dairy farmers bring in legislation.”
Redman anticipates the Idaho Legislature will consider more PBM legislation in the future.
“Because of the complications, and truthfully, how slick the PBMs are — they hire the best lawyers in the world to try to create loopholes in contracts — I think this is going to continue to come back. I think this is like a maintenance bill every year to keep these in check,” Redman said. “But again, at the end of the day, this is big pharma trying to create a monopoly, to squash little guys, to create, again, a one-payer system that they can control completely and drive cost to the moon.”
How Idaho Department of Insurance prepares to implement PBM law
The Department of Insurance already licenses PBMs, as required under a recently passed Idaho bill. And the insurance department is open to accepting complaints related to PBMs, which Hohl said the agency hasn’t seen.
But “that’s been the extent” of the Department of Insurance’s involvement with PBMs, she said. PBMs aren’t health insurers, so they aren’t the kind of entity that the Idaho Department of Insurance typically deals with, Hohl said.
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Now, the agency will manage reporting required by the new law. To help, the Department of Insurance is seeking out PBMs experts to help.
Hohl said the agency has hired a pharmacy benefit market examiner, which she says will work with a contractor that Idaho is accepting bids for. The new employee will also help the agency plan fine details about the new reporting, like timelines and giving guidance to PBMs, she said.
Some of what the law requires “is outside of our expertise,” Hohl told the Sun.
“We need help from professionals who know this world to develop what needs to be. The law says what needs to be in the reports, but … what are the details of what needs to be in the reports? And how does that make sense to a PBM? And how can we make sure that we’re getting what, what’s required by the law?” she said.
But she says the agency is under a tight timeline to plan for the new law.
“Frankly, this first year may be a little bumpy. We’re going to do our best to help the industry be compliant, by giving them the guidance that we can give them in as timely a manner as we can to make sure they have enough time to meet those deadlines, and then we get what we need, and we’re compliant with the law,” Hohl said.
How the new law’s compliance work is funded
The Legislature gave the Idaho Department of Insurance more funds for the new job.
Along with the new law, the Legislature passed a trailer bill, approving one new position in the Department of Insurance, and appropriating $132,400 to the agency for personnel costs for Idaho’s fiscal year 2025, which started July 1 and ends in June 2025.
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But the contractor that the Department of Insurance hopes to also help with the law’s implementation is coming from the agency’s base budget, Hohl said. Costs are unclear for the contract, which Idaho has out for bid through a request for proposal.
One request for the contractor, Hohl said, is to survey dispensing fees across the state to help the agency to get a sense of what’s “reasonable.”
The contract’s initial term would be for two years, subject to renewals, with a four year total term anticipated, according to a draft of the request for proposal as of Tuesday afternoon. But details in the request are subject to change, Idaho Department of Administration spokesperson Kim Rau told the Sun.
The Department of Insurance might not keep contracting out the work long-term, Hohl said, but it made sense to start.
The May 19 primary election will have a big impact on Idaho’s Legislature, with moderate and hardline Republicans facing off across the state.
Over the past two months, Idaho EdNews profiled 14 of the most significant races for education policy. Here they are in one place.
Follow our coverage on election night, with real-time results and breaking news updates. Click here for information on how to vote and find your sample ballot.
North Idaho
- Who is running: Three-term Sen. Jim Woodward, R-Sagle, faces a fourth primary election against Scott Herndon.
- Why it matters: This matchup is one of the most expensive primaries this year. Woodward is a “middle of the road” Republican who sits on the Joint Finance-Appropriations Committee. Herndon is a more hardline Republican who wants to eliminate property taxes.
- Who is running: Two-term Rep. Elaine Price, R-Coeur d’Alene, faces Christa Hazel for District 4 House Seat B.
- Why it matters: This race is a proxy fight in the war between the hardline Kootenai County Republican Central Committee (Price) and the moderate North Idaho Republicans (Hazel).
- Who is running: Three-term Sen. Dan Foreman, R-Moscow, faces Rep. Lori McCann, a Lewiston Republican who has left her seat in the House for a Senate run.
- Why it matters: Foreman is a hardline Republican who faced criticism from the right this year for holding in committee a bill to rein in teachers’ unions. McCann said she’s challenging him over his refusal to collaborate and communicate.
West Idaho
- Who is running: Four-term legislator Sen. Christy Zito faces a three-way primary with two former legislators in the district: former House Majority Leader Megan Blanksma and five-term Rep. Terry Gestrin.
- Why it matters: Zito is a member of the hardline Gang of Eight and sits on the Senate Education committee. Republicans in the House ousted Blanksma from leadership in 2024. She says Zito isn’t representing her district. Gestrin said he wants to get back into the Statehouse to solve problems for folks in the large, rural district.
- Who is running: First-term Sen. Camille Blaylock faces a rematch with retired Marine and former legislator Chris Trakel.
- Why it matters: Blaylock sponsored a $5 million high-needs fund for special education this year. Trakel sued the Idaho Home Learning Academy in 2025, claiming the virtual school discriminated against his constitutional right to free exercise of religion. A judge dismissed the suit.
- Who is running: Two young Democrats with backgrounds in education are running for the wide-open District 16 House Seat A. Megan Woller leads the Idaho Head Start Association and Jeffrey Watkins is a West Ada public school teacher and union rep.
- Why it matters: Watkins and Woller are running to replace Rep. Soñia Galaviz, a public school teacher and House Education member, in the reliably blue district. Woller said she has the diplomacy and negotiation skills to be a legislator. Watkins said Democrats need to be “incredibly vocal” in opposition to bills that harm Idahoans.
- Who is running: First-term legislator Rep. Chris Bruce, R-Kuna, faces a rematch with Melissa Durrant for District 23 House Seat A.
- Why it matters: School choice groups like the American Federation for Children are focusing on this race, supporting Bruce and opposing Durrant. Bruce believes state funding should follow the child whether they attend public, private or home schools. Durrant opposed an early version of the Parental Choice Tax Credit because there was no priority for lower income families.
Magic Valley
- Who is running: Two-term Sen. Glenneda Zuiderveld, R-Twin Falls, faces Twin Falls County Commissioner Brent Reinke.
- Why it matters: Zuiderveld is a prominent member of the hardline Gang of Eight and routinely opposes budget enhancements, including additional funding for the College of Southern Idaho. Reinke has decades of experience as a public servant and says Zuiderveld isn’t representing the district.
- Who is running: First-term Rep. Clint Hostetler, R-Twin Falls, faces attorney Alexandra Caval for District 24 House Seat A.
- Why it matters: In his first week as a legislator, Hostetler in 2025 introduced a $250 million private school tax credit bill. Caval said she hopes the primary election will be a “course correction” for the Magic Valley after Hostetler won two years ago.
East Idaho
- Who is running: Two-term Rep. Rick Cheatum faces a three-way rematch with day trader James Lamborn and Air Force veteran Mike Saville for District 28 House Seat A.
- Why it matters: Cheatum last year voted against the $50 million Parental Choice Tax Credit. Lamborn, a strong school choice supporter, said District 28 deserves a conservative, constitutional, Christian Republican. Saville has run for office as a Democrat, an independent and a Republican. He said he supports the country first, not the party.
- Who is running: First-term Rep. Ben Fuhriman faces a rematch with former legislator Julianne Young for District 30 House Seat B.
- Why it matters: Fuhriman sponsored the $5 million high-needs special education fund bill this year and opposed a bill to rein in teachers’ unions. Young is a social conservative who has worked on culture war bills, such as defining genders and prohibiting public funds for gender transition procedures.
- Who is running: Four-term Rep. Rod Furniss faces former legislator Karey Hanks for District 31 House Seat B.
- Why it matters: Furniss has worked on legislation to make it easier for districts to pass bonds and find funding to build schools. Hanks, a school bus driver, wants to get back into the Statehouse to protect children from the “woke” agenda. The two share similar views on social issues and support the transgender bathroom bill.
- Who is running: Four-term Rep. Barbara Ehardt faces a challenge from firefighter Connor Cook.
- Why it matters: Ehardt is a staunch social conservative who said the transgender community started the culture war, not the Idaho Legislature. Cook, a union member, says Idaho has “gone rogue” and is using social issues as a distraction from the budget.
- Who is running: First-term Rep. Mike Veile faces former legislator Chad Christensen in District 35 House Seat A.
- Why it matters: Veile, a former Soda Springs trustee, sits on the House Education Committee. He opposes private school tax credits and said Idaho doesn’t have enough funding to support multiple education systems. Christensen supports school choice and would like to explore school district consolidation.
A recent Idaho law could slow the process for some child custody disputes and even adoption cases, the Idaho Supreme Court found in a ruling this week.
The law, created in 2025 through Senate Bill 1181, means some Idaho parents who can’t afford legal representation won’t have state-provided defense attorneys in cases that could risk them permanently losing their kids, the court found.
In the opinion, the court alluded to an essentially unenforceable right to public defense in some parental rights termination cases brought by private parties, rather than the state Department of Health and Welfare. That’s because courts can’t require the state’s public defenders to represent parents in those privately brought cases, the Idaho Supreme Court found.
“This gap created by Senate Bill 1181 is vitally important matter that needs to be addressed by the Idaho Legislature. If constitutionally required representation cannot be provided in private termination cases, it will likely result in serious delays or even dismissals of cases affecting Idaho’s children and parents,” Chief Justice G. Richard Bevan wrote in the opinion published Tuesday. “It may mean that children awaiting adoption cannot be adopted.”
The decision comes more than a year after the Legislature passed the bill over the objections of child welfare attorneys, who warned about the bill’s impact on parents’ right to legal counsel. The bill was pitched as a way to control the workload of public defenders as the state overhauled its public defense system.
Attorney says this is the ‘conundrum’ she warned Idaho Legislature about
There are two ways parental rights termination cases can be brought: By the state — often initiated by a state Department of Health and Welfare, or by a private party, such as one parent wanting to end the rights of another parent.
For over 60 years, Idaho law gave parents deemed legally indigent — essentially those who can’t pay legal bills — and who were facing parental rights’ termination cases “with a categorical right to an attorney at public expense,” Bevan explained in the opinion.
But in 2025, he wrote all of that changed when the Legislature passed Senate Bill 1181.
The bill was meant to control the workloads of public defenders as the state consolidated public defense from counties into one statewide office. But at the time, two child welfare attorneys warned the law might inadvertently end the right to legal counsel in privately brought parental right termination cases, the Idaho Capital Sun reported.
One of the attorneys who testified on the bill, Mary Shea from Pocatello, said in an interview that the court described “exactly the conundrum” that she was trying to warn the Legislature about.
“It’s an invitation to the Legislature to fix this, and to provide some kind of a funding mechanism so that those private terminations and adoptions can continue to proceed,” she said. “Because we do have a shortage of attorneys in this state. It is very difficult for us to provide the low-income and pro bono needs for the entire state.”
Sen. Todd Lakey, a Nampa Republican who was the bill’s original sponsor, said in an interview that the Legislature could take up clarifications next year.
“I personally am reluctant to have the taxpayers fund legal costs in a private party termination,” Lakey said on Wednesday. “That said, I recognize that there is a certain situation where it’s constitutionally required, and I want to make sure we’re limiting the burden on the taxpayers to only those situations, where it’s fundamentally required constitutionally. I think as the court noted, that’s kind of a case by case basis, depending on the circumstances.”
Rep. Dustin Manwaring, a Pocatello Republican who also cosponsored the bill, said in an interview that he already has ideas for legislation to address that issue flagged in the ruling.
“When representation is appointed and is constitutionally required, then we need to clarify who’s picking up the tab for that. So, we will do that. And I will personally commit to taking that on and making sure we get that done,” he said.
How the Idaho Supreme Court ruled
The bill, Bevan wrote, requires the State Public Defender’s Office only to represent parents deemed legally indigent in parental rights’ termination cases brought by the state — not by private parties.
“That begs the question: if representation is constitutionally required in a private termination case, who would provide it?” Bevan asked.
Parents in private parental termination cases sometimes still have due process rights to public defense counsel, Bevan wrote, pointing to precedent in the U.S. Supreme Court. But since Idaho courts can no longer order the State Public Defender’s Office or counties to pay for that defense, he wrote that the courts effectively can’t appoint public legal representation in those cases.
“If neither the (State Public Defender’s Office) nor the counties can be required to provide representation, a private termination proceeding may fail to comply with the requirements of due process,” Bevan wrote. “The legislature has eliminated the options available to courts for appointment of counsel at public expense.”
Some parents who are entitled to representation won’t get it, he wrote.
“We have little doubt that, so long as the representation gap created by Senate Bill 1181 exists, at least some indigent parents who constitutionally require representation will not get it,” Bevan wrote.
Idaho State Public Defender Office spokesperson Patrick Orr said in a statement that the agency hasn’t been assigned any private termination cases since the court took up the case in October.
“Our view is the same now as it was last year. Our office provides indigent defense representation – and representation for parents in Child Protective Act cases where the state seeks to interfere with a parent-child relationship,” he said. But, he added, “we can’t provide legal representation in a private termination case.”
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From artisan jewelry to cowboy boot spurs, women silversmiths in Idaho turn raw metal into works of art. As part of a special Expressive Idaho series, we are revisiting a gathering of Idaho artisans called the “Cowgirl Congress.”
This story was made to be heard. Click or tap the ‘Listen’ button above for the full audio.
Transcript:
CERISE: I wanted every piece to be hand forged and individual and unique. It’s very rare that I make two pieces that are exactly the same. My name is Mary Cerise and I am the owner of Hanging Moon Silver, which is a silver company. I make fine and very wearable art out of sterling and fine silver. I am not originally from Salmon, but it’s been my home for 16 years and I really enjoy that little kind of nook of the world that is off the beaten path. And it is definitely a destination.
Arlie Sommer
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Idaho Commission on the Arts
WANGSGARD: I’m Annie Wangsgard and I live in Milad, Idaho. And I’m a silversmith and I’ve been silversmithing for 12 years, I think, right around there. My favorite part about probably the whole process of anything that I make is the design, you know, the design process, and trying to come up with something that has never been done before, I guess I rate my success on whether I’m able to take the image in my brain and the idea and then bring it to life. And if I can do that, then it’s success.
CERISE: I use a lot of opals and turquoise. I’m very particular about my sourcing of stones, so I use very ethically sourced, I know all of my miners and my lapidary cutters, and that’s very important to me that I’m buying right from the guys who dig it out of the ground.
WANGSGARD: When I first got started, I was really drawn to rings. I, a little bit got branded as a ring maker, you know, a western ring maker, which is great, I’ll make lots of different things. I’ve made spurs. And I’ve made a bit. And um, it’s definitely a lot different than just silversmithing. Working with steel is a lot dirtier than working with silver.
Arlie Sommer
/
Idaho Commission on the Arts
CERISE: This Idaho Cowgirl Congress. And there’s something about being with other makers, even if they’re not silversmiths, maybe they’re not metal workers, they’re leather workers or fiber artists, fine artists. We travel along the same path a lot. I love the opportunity for collaboration, and I just want to continually learn. That’s my definition of success, is continually striving to learn more and push harder. Some of the hardest days give me the best pieces of work because usually those are the most beautiful times. We have similar difficulties with or challenges that we face, right? Having these businesses and being an artist. And we also have big successes, and those are the people that celebrate your successes. So I would say, it feels like coming home.
This Expressive Idaho episode was produced by Lauren Paterson, with interviews recorded by Arlie Sommer and edited by Sáša Woodruff. Music by Lobo Loco.
The web article was written and edited by Katie Kloppenburg and Lacey Daley.
Expressive Idaho is made in partnership with the Idaho Commission on the Arts’ Folk and Traditional Arts Program. This program is supported in part by the National Endowment for the Arts.
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