1.1 	A bill for an act
1.2 	relating to state government; changing provisions covering technology platform, 
1.3 	pharmacy benefit manager, and data protection in vendor contracts; amending 
1.4 	Minnesota Statutes 2024, section 43A.231, subdivisions 3, 4, 6.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2024, section 43A.231, subdivision 3, is amended to read:
1.7 		Subd. 3.Procurement of a pharmacy benefit manager. (a) Notwithstanding any law 
1.8 	to the contrary, the commissioner of management and budget shall procure a contract for 
1.9 	the services of a pharmacy benefit manager to administer the prescription drug benefit and 
1.10 	pharmacy benefit management services, effective January 1, 2023. For subsequent 
1.11 	procurements, if the commissioner intends to separate prescription drug benefit and pharmacy 
1.12 	benefit management services into multiple vendors or intends to fold prescription drug 
1.13 	benefits into the overall medical benefit, rather than a single full-service pharmacy benefit 
1.14 	manager, this section shall not apply.
1.15 	(b) For the contract effective January 1, 2023, the commissioner shall conduct a reverse 
1.16 	auction as described in this section to select the pharmacy benefit manager and use a reverse 
1.17 	auction for procurement of subsequent pharmacy benefit manager contracts as provided in 
1.18 	subdivision 5, paragraph (b).
1.19 	(c) In consultation with the technology platform vendor selected under subdivision 4, 
1.20 	the commissioner shall specify the terms of a participant bidding agreement that all bidders 
1.21 	must accept as a prerequisite for participation in the reverse auction process, including:
1.22 	(1) common definitions;
2.1 	(2) prescription drug classifications;
2.2 	(3) retail pricing rules, including maximum allowable cost price lists and dispensing 
2.3 	fees; and
2.4 	(4) any other contract terms the commissioner deems necessary to further the purpose 
2.5 	of this section as specified under subdivision 2.
2.6 	(d) A pharmacy benefit manager who submits a bid under this subdivision must provide 
2.7 	the commissioner access to complete pharmacy claims data necessary for the commissioner 
2.8 	to conduct the reverse auction and to carry out administrative and management duties.
2.9 	(e) The terms of a contract entered into under this subdivision shall not be modified by 
2.10 	the pharmacy benefit manager except with the approval of the commissioner.
2.11 	(f) The commissioner may structure the contract awarded under this subdivision to pay 
2.12 	the cost of the technology platform and the associated professional services contracted for 
2.13 	under this subdivision by assessing a fee per prescription to be paid directly by the pharmacy 
2.14 	benefit manager to the technology platform vendor.
2.15 	(g) The commissioner must perform annual market checks on pharmacy benefit manager 
2.16 	services performed by the pharmacy benefit manager during the term of the contract. A 
2.17 	market check performed under this paragraph may include an evaluation of the effect of 
2.18 	alternative drug pricing metrics, such as the national average drug acquisition cost and 
2.19 	average wholesale price, on the cost of prescription drugs and savings to the state.
2.20 	(h) The commissioner shall make regular, periodic payment of invoices within the time 
2.21 	periods specified in the contract based on the automated adjudication of invoiced claims 
2.22 	using the technology platform to validate that claims payments comply with the terms of 
2.23 	the contract.
2.24 	(i) The joint labor-management committee on health plans shall assist in the process 
2.25 	through which the commissioner conducts the reverse auction, evaluation, and comparison 
2.26 	of the competing pharmacy benefit manager bids for award of the contract.

2.27 	Sec. 2. Minnesota Statutes 2024, section 43A.231, subdivision 4, is amended to read:
2.28 		Subd. 4.Technology platform. (a) At least three months before the reverse auction 
2.29 	process is scheduled to be completed, The commissioner shall procure through a competitive 
2.30 	bidding process a contract with a professional services vendor for a technology platform 
2.31 	and any associated professional services necessary to operate the platform to:
3.1 	(1) evaluate the qualifications of prospective pharmacy benefit manager bidders for the 
3.2 	pharmacy benefit manager procurement;
3.3 	(2) automatically adjudicate prescription drug claims; and
3.4 	(3) collect data on pharmacy reimbursement.
3.5 	(b) The platform procured under paragraph (a) must have the following capabilities to 
3.6 	ensure optimal performance of the reverse auction and security of data:
3.7 	(1) host and conduct an online automated reverse auction:
3.8 	(i) using a software application and high-performance data infrastructure to intake, 
3.9 	cleanse, and normalize pharmacy benefit manager data; and
3.10 	(ii) with development methods and information security standards that have been validated 
3.11 	by receiving Service Organization Control 2 (SOC 2) and National Institute of Standards 
3.12 	and Technology certification;
3.13 	(2) automate repricing of diverse and complex pharmacy benefit manager prescription 
3.14 	drug pricing proposals to enable direct comparisons of the price of bids using all annual 
3.15 	claims data available for the program using code-based classification or prescription drugs 
3.16 	from nationally accepted drug sources;
3.17 	(3) simultaneously evaluate, within six hours, diverse and complex multiple proposals 
3.18 	from full-service pharmacy benefit managers that shall include at least guaranteed net cost, 
3.19 	Average Wholesale Price and National Average Drug Acquisition Cost (NADAC) pricing 
3.20 	models, as well as proposals from pharmacy benefit administrators and specialty drug and 
3.21 	rebate carve-out services providers; and
3.22 	(4) produce an automated report and analysis of bids, including ranking of bids on the 
3.23 	comparative costs and qualitative aspects of the costs within six hours after the close of 
3.24 	each round of reverse auction bidding; and.
3.25 	(5) after the close of the reverse auction process, perform an electronic, line-by-line, 
3.26 	claim-by-claim review of all invoiced pharmacy benefit manager claims within six hours 
3.27 	of receipt that allows for an online comparison of pharmacy benefit manager invoices and 
3.28 	identifies all deviations from the specific terms of the services contract resulting from the 
3.29 	reverse auction.
3.30 	(c) The commissioner may require additional capabilities or more rigorous standards 
3.31 	than those specified in paragraph (b).
4.1 	(d) The commissioner shall not award the platform technology vendor contract under 
4.2 	this subdivision to:
4.3 	(1) a pharmacy benefit manager;
4.4 	(2) a subsidiary or affiliate of a pharmacy benefit manager; or
4.5 	(3) a vendor who is managed by a pharmacy benefit manager or who receives, directly 
4.6 	or indirectly, remuneration from a pharmacy benefit manager for aggregating clients into 
4.7 	a contractual relationship with a pharmacy benefit manager.
4.8 	(e) The vendor who is awarded the contract under this subdivision must not subcontract 
4.9 	any part of the reverse auction process or the review described under paragraph (b), clause 
4.10 	(5) The commissioner shall also hire a vendor to perform an electronic, line-by-line, 
4.11 	claim-by-claim review of all invoiced pharmacy benefit manager claims that allows for an 
4.12 	online comparison of pharmacy benefit manager invoices and identifies all deviations from 
4.13 	the specific terms of the services contract resulting from the reverse auction.  The claim 
4.14 	review vendor and the platform vendor may be the same or they may be distinct.

4.15 	Sec. 3. Minnesota Statutes 2024, section 43A.231, subdivision 6, is amended to read:
4.16 		Subd. 6.Data protections. The commissioner of management and budget may only 
4.17 	enter into an agreement with a technology platform vendor vendors under this section if the 
4.18 	agreement providesagreements provide privacy protections for data collected and maintained 
4.19 	by the technology platform vendor vendors, including:
4.20 	(1) procedures for the prevention of unauthorized access or use;
4.21 	(2) a prohibition on the sale of data collected and maintained as provided in the 
4.22 	agreement; and
4.23 	(3) a prohibition on dissemination of data unless authorized by state or federal law or 
4.24 	the agreement.