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Minnesota Legislature

Office of the Revisor of Statutes

HF 2950

as introduced - 90th Legislature (2017 - 2018) Posted on 03/19/2018 01:22pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to insurance; providing for the licensing of pharmacy benefit managers;
amending Minnesota Statutes 2016, section 60A.23, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2016, section 60A.23, is amended by adding a subdivision
to read:


new text begin Subd. 9. new text end

new text begin Pharmacy benefit manager. new text end

new text begin (a) "Pharmacy benefit manager" means a person,
business, or other entity that, pursuant to a contract or under an employment relationship
with a health plan company, a self-insurance plan, or other third-party payer, either directly
or through an intermediary, manages the prescription drug coverage provided by the health
plan company, self-insurance plan, or other third-party payer including, but not limited to,
the processing and payment of claims for prescription drugs, the performance of drug
utilization review, the processing of drug prior authorization requests, the adjudication of
appeals or grievances related to prescription drug coverage, contracting with network
pharmacies, and controlling the cost of covered prescription drugs.
new text end

new text begin (b) A pharmacy benefit manager shall be licensed by the commissioner before conducting
business in this state. Licensure of a pharmacy benefit manager pursuant to this section is
not transferable. The license may be granted only when the commissioner is satisfied that
the entity possesses the necessary organization, background expertise, and financial integrity
to supply the services sought to be offered. The commissioner may issue a license subject
to restrictions or limitations upon the authorization, including the type of services that may
be supplied or the activities in which the entity may be engaged. The license fee is $1,500
for the initial application and $1,500 for each three-year renewal. All licenses are for a
period of three years. The commissioner shall develop an application for licensure that
includes the following information:
new text end

new text begin (1) the name of the pharmacy benefit manager;
new text end

new text begin (2) the address and contact telephone number for the pharmacy benefit manager;
new text end

new text begin (3) the name and address of the pharmacy benefit manager's agent for service of process
in the state;
new text end

new text begin (4) the name and address of each person beneficially interested in the pharmacy benefit
manager; and
new text end

new text begin (5) the name and address of each person with management or control over the pharmacy
benefit manager.
new text end

new text begin (c) The commissioner may suspend, revoke, or place on probation a pharmacy benefit
manager's license under any of the following circumstances:
new text end

new text begin (1) the pharmacy benefit manager has engaged in fraudulent activity that constitutes a
violation of state or federal law;
new text end

new text begin (2) the commissioner has received consumer complaints that justify an action under this
subdivision in order to protect the safety and interests of consumers;
new text end

new text begin (3) the pharmacy benefit manager fails to pay an application fee for the license; or
new text end

new text begin (4) the pharmacy benefit manager fails to comply with a requirement set forth in this
subdivision.
new text end

new text begin (d)(1) A pharmacy benefit manager shall exercise good faith and fair dealing in the
performance of its contractual duties to a purchaser. A provision in a contract that attempts
to affect a waiver or limitation of this obligation is void.
new text end

new text begin (2) A pharmacy benefit manager shall notify a purchaser in writing of any activity,
policy, or practice of the pharmacy benefit manager that directly or indirectly presents a
conflict of interest that interferes with the discharge of the pharmacy benefit manager's duty
to the purchaser to exercise good faith and fair dealing in the performance of its contractual
duties.
new text end

new text begin (e) Beginning in the second quarter after the effective date of a contract between a
pharmacy benefit manager and a health plan company, a self-insurance plan, or other
third-party payer, the pharmacy benefit manager shall, on a quarterly basis, disclose, upon
the request of the health plan company, a self-insurance plan, or other third-party payer, the
following information with respect to prescription product benefits specific to the health
plan company, a self-insurance plan, or other third-party payer:
new text end

new text begin (1) the aggregate wholesale acquisition costs from a pharmaceutical manufacturer or
wholesale drug distributor for each therapeutic category of drugs;
new text end

new text begin (2) the aggregate amount of rebates received by the pharmacy benefit manager by
therapeutic category of drugs. The aggregate amount of rebates shall include any utilization
discounts the pharmacy benefit manager receives from a pharmaceutical manufacturer or
wholesale drug distributor;
new text end

new text begin (3) any administrative fees received from a pharmaceutical manufacturer or wholesale
drug distributor;
new text end

new text begin (4) whether the pharmacy benefit manager has a contract, agreement, or other arrangement
with a pharmaceutical manufacturer to exclusively dispense or provide a drug to a health
plan company's, a self-insurance plan's, or other third-party payer's employees, insureds,
or enrollees, and the application of all consideration or economic benefits collected or
received pursuant to that arrangement;
new text end

new text begin (5) prescription drug utilization information for the health plan company's, self-insurance
plan's, or other third-party payer's enrollees or insureds that is not specific to any individual
enrollee or insured;
new text end

new text begin (6) the aggregate of payments made by the pharmacy benefit manager to pharmacies
owned or controlled by the pharmacy benefit manager;
new text end

new text begin (7) the aggregate of payments made by the pharmacy benefit manager to pharmacies
not owned or controlled by the pharmacy benefit manager; and
new text end

new text begin (8) the aggregate amount of the fees imposed on, or collected from, network pharmacies
or other assessments against network pharmacies, and the application of those amounts
collected pursuant to the contract with the health plan company, self-insurance plan, or
other third-party payer.
new text end

new text begin (f) By February 1 of each year, a licensed pharmacy benefit manager must report to the
commissioner the information required by paragraph (e), clauses (1) to (8), for the previous
calendar year.
new text end