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Minnesota Legislature

Office of the Revisor of Statutes

HF 1178

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to health; requiring the disclosure of
financial information and arrangements related to
prescription drug purchasing; requiring rulemaking;
providing civil penalties; amending Minnesota Statutes
2004, section 151.061, subdivision 2; proposing coding
for new law as Minnesota Statutes, chapter 151A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 151.061,
subdivision 2, is amended to read:


Subd. 2.

151A.01 Definitions.

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin The definitions in this
section apply to this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the
commissioner of health.
new text end

new text begin Subd. 3. new text end

new text begin Covered entity. new text end

new text begin "Covered entity" means a
hospital; a health maintenance organization operating under
chapter 62D; an insurance company licensed under chapter 60A; a
nonprofit health service plan corporation operating under
chapter 62C; a fraternal benefit society operating under chapter
64B; a joint self-insurance employee health plan operating under
chapter 62H; a health program administered by a department or
the state in the capacity of provider of health coverage; or an
employer, labor union, or other group of persons organized in
the state that provides health coverage to covered individuals
who are employed or reside in the state. Covered entity does
not include a self-funded plan that is exempt from state
regulation pursuant to the Employee Retirement and Income
Security Act; a plan issued for coverage for federal employees;
or a health plan that provides coverage only for accidental
injury, a specified disease, hospital indemnity, Medicare
supplement, disability income, long-term care, or other limited
benefit health insurance policies and contracts.
new text end

new text begin Subd. 4. new text end

new text begin Covered individual. new text end

new text begin "Covered individual" means
a member, participant, enrollee, contract holder, policyholder,
or beneficiary of a covered entity who is provided health
coverage by the covered entity. Covered individual includes a
dependent or other person provided health coverage through a
policy, contract, or plan for a covered individual.
new text end

new text begin Subd. 5. new text end

new text begin Generic drug. new text end

new text begin "Generic drug" means a chemically
equivalent copy of a brand name drug with an expired patent.
new text end

new text begin Subd. 6. new text end

new text begin Labeler. new text end

new text begin "Labeler" means an entity or person
that receives prescription drugs from a manufacturer or
wholesaler and repackages those drugs for later retail sale and
that has a labeler code from the federal Food and Drug
Administration under Code of Federal Regulations, title 21,
section 207.20.
new text end

new text begin Subd. 7. new text end

new text begin Pharmacy benefits management. new text end

new text begin "Pharmacy
benefits management" means the procurement of prescription drugs
at a negotiated rate for dispensation within the state to
covered individuals, the administration or management of
prescription drug benefits provided by a covered entity for the
benefit of covered individuals, or any of the following services
provided with regard to the administration of pharmacy benefits:
new text end

new text begin (1) mail service pharmacy;
new text end

new text begin (2) claims processing, retail network management, and
payment of claims to pharmacies for prescription drugs dispensed
to covered individuals;
new text end

new text begin (3) clinical formulary development and management services;
new text end

new text begin (4) rebate contracting and administration;
new text end

new text begin (5) patient compliance, therapeutic intervention, and
generic substitution programs; and
new text end

new text begin (6) disease management programs.
new text end

new text begin Subd. 8. new text end

new text begin Pharmacy benefits manager. new text end

new text begin "Pharmacy benefits
manager" means an entity that performs pharmacy benefits
management. Pharmacy benefits manager includes a person or
entity acting for a pharmacy benefits manager in a contractual
or employment relationship in the performance of pharmacy
benefits management for a covered entity and includes mail
service pharmacy.
new text end

Sec. 3.

new text begin [151A.03] CERTIFICATE OF AUTHORITY.
new text end

new text begin No person or entity may perform or act as a pharmacy
benefits manager in this state without a valid certificate of
authority issued by the commissioner. Each person or entity
seeking a certificate of authority to act as a pharmacy benefits
manager shall file with the commissioner an application for a
certificate of authority upon a form to be furnished by the
commissioner and a filing fee to be determined by the
commissioner. The commissioner may establish a filing fee
notwithstanding section 16A.1283.
new text end

Sec. 4.

new text begin [151A.05] DISCLOSURE.
new text end

new text begin (a) Each pharmacy benefits manager shall provide to a
covered entity and any other person that it contracts with in
the state:
new text end

new text begin (1) all financial and utilization information requested by
the covered entity relating to the provision of benefits to
covered individuals through that covered entity and all
financial and utilization information relating to services to
that covered entity or person; and
new text end

new text begin (2) all financial terms and arrangements for remuneration
of any kind that apply between the pharmacy benefits manager and
any prescription drug manufacturer, labeler, or pharmacy,
including formulary management and drug-switch programs,
educational support, claims processing, pharmacy network fees
that are charged from retail pharmacies, and data sales fees.
new text end

new text begin (b) The pharmacy benefits manager shall provide all
information identified in paragraph (a), clause (2), to the
commissioner and the attorney general's office. The information
may be used for law enforcement purposes, including the
enforcement of section 151.061.
new text end

Sec. 5.

new text begin [151A.07] DISPENSATION OF SUBSTITUTE PRESCRIPTION
DRUG.
new text end

new text begin (a) With regard to the dispensation of a substitute
prescription drug for a prescribed drug to a covered individual,
the following provisions apply:
new text end

new text begin (1) the pharmacy benefits manager may request the
substitution of a lower-priced generic and therapeutically
equivalent drug for a higher-priced prescribed drug; and
new text end

new text begin (2) if the substitute drug costs more than the prescribed
drug, the substitution must only be made for medical reasons
that benefit the covered individual.
new text end

new text begin (b) Before a substitution is made under this section, the
pharmacy benefits manager shall obtain approval of the
prescribing health professional and must disclose to the covered
individual and the covered entity the cost of both drugs and any
benefit or payment directly or indirectly accruing to the
pharmacy benefits manager as a result of the substitution.
new text end

Sec. 6.

new text begin [151A.09] ENFORCEMENT.
new text end

new text begin The commissioner shall enforce this chapter, including the
suspension or revocation of the authority of a pharmacy benefits
manager to provide pharmacy benefits management in this state
for a violation of this chapter or the imposition of a monetary
penalty not to exceed $25,000 for each violation. The attorney
general may pursue the penalties and remedies available to the
attorney general under section 8.31 for any violation of this
chapter.
new text end

Sec. 7.

new text begin [151A.11] RULES.
new text end

new text begin The commissioner shall adopt rules to issue a certificate
of authority and to enforce this chapter.
new text end

Sec. 8.

new text begin [151A.13] CIVIL ACTION.
new text end

new text begin A covered entity may bring a civil action to enforce the
provisions of this chapter or to seek civil damages for the
violation of this chapter.
new text end