HF 5469

as introduced - 93rd Legislature (2023 - 2024) Posted on 05/13/2024 10:49am

A bill for an act
relating to health; requiring pharmacy benefit managers and health carriers to
include lower-cost drugs in their formularies; requiring formulary structure and
formulary tiering for each health plan to give preference to the drug with the lowest
out-of-pocket cost to the patient; proposing coding for new law in Minnesota
Statutes, chapter 62W.

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

Section 1.

new text begin [62W.16] INCLUSION OF LOWER-COST DRUGS IN FORMULARY.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following definitions
apply.
new text end

new text begin (b) "Biologic" has the meaning provided in section 62J.86, subdivision 3.
new text end

new text begin (c) "Biosimilar" has the meaning provided in section 62J.84, subdivision 2, paragraph
(b).
new text end

new text begin (d) "Brand name drug" has the meaning provided in section 62J.84, subdivision 2,
paragraph (c).
new text end

new text begin (e) "Equivalent" means:
new text end

new text begin (1) with respect to a generic drug, the brand name drug against which the generic drug
is evaluated by the United States Food and Drug Administration under United States Code,
title 21, section 355(j); and
new text end

new text begin (2) with respect to a biosimilar, the brand name drug biological product as defined in
United States Code, title 42, section 262(i).
new text end

new text begin (f) "Generic drug" has the meaning provided in section 62J.84, subdivision 2, paragraph
(e).
new text end

new text begin (g) "Health plan" means a policy, contract, certificate, or agreement defined in section
62A.011, subdivision 3.
new text end

new text begin (h) "Out-of-pocket cost" means any coinsurance, co-payment, or other form of
cost-sharing for which a patient is responsible.
new text end

new text begin (i) "Wholesale acquisition cost" has the meaning provided in section 62J.86, subdivision
11.
new text end

new text begin Subd. 2. new text end

new text begin Brand name, generic, and biosimilar drugs; inclusion of lowest-cost drug
in formulary. new text end

new text begin (a) If a pharmacy benefit manager or health carrier includes in its formulary
a brand name drug, it must also include in its formulary, if applicable, the equivalent generic
drug that has a wholesale acquisition cost that is lower than:
new text end

new text begin (1) the wholesale acquisition cost of the brand name drug; and
new text end

new text begin (2) the wholesale acquisition cost of any other equivalent generic drug.
new text end

new text begin (b) If a pharmacy benefit manager or health carrier includes in its formulary a generic
drug, it must also include in its formulary, if applicable, the brand name drug to which the
generic drug is equivalent, if the brand name drug has a wholesale acquisition cost that is
lower than:
new text end

new text begin (1) the wholesale acquisition cost of the generic drug included in the formulary; and
new text end

new text begin (2) the wholesale acquisition cost of any other equivalent generic drug.
new text end

new text begin (c) If a pharmacy benefit manager or health carrier includes in its formulary a brand
name biologic, it must also include in its formulary, if applicable, the equivalent biosimilar
that has a wholesale acquisition cost that is lower than:
new text end

new text begin (1) the wholesale acquisition cost of the brand name biologic; and
new text end

new text begin (2) the wholesale acquisition cost of any other equivalent biosimilar.
new text end

new text begin (d) If a pharmacy benefit manager or health carrier includes in its formulary a biosimilar,
it must also include in its formulary, if applicable, the brand name biologic to which the
biosimilar is equivalent, if the brand name biologic has a wholesale acquisition cost that is
lower than:
new text end

new text begin (1) the wholesale acquisition cost of the biosimilar included in the formulary; and
new text end

new text begin (2) the wholesale acquisition cost of any other equivalent biosimilar.
new text end

new text begin Subd. 3. new text end

new text begin New generic and biosimilar drugs; inclusion of lowest-cost drug in
formulary. new text end

new text begin (a) If a generic drug is approved by the United States Food and Drug
Administration, is marketed pursuant to that approval, and has a wholesale acquisition cost
that is less than the brand name drug or generic drug with the lowest wholesale acquisition
cost already included in the formulary of a pharmacy benefit manager or health carrier, the
pharmacy benefit manager or health carrier must immediately make the newly approved
generic drug available on its formulary.
new text end

new text begin (b) If a biosimilar is approved by the United States Food and Drug Administration, is
marketed pursuant to that approval, and has a wholesale acquisition cost that is less than
the brand name biologic or biosimilar with the lowest wholesale acquisition cost already
included in the formulary of a pharmacy benefit manager or health carrier, the pharmacy
benefit manager or health carrier must immediately make the newly approved biosimilar
available on its formulary.
new text end

new text begin Subd. 4. new text end

new text begin Formulary structure and tiering. new text end

new text begin (a) A pharmacy benefit manager or health
carrier must structure its formulary and any formulary tiers for each health plan in a manner
that gives preference to the brand name drug or the equivalent generic drug that has the
lowest out-of-pocket cost to the patient purchasing the drug product. The pharmacy benefit
manager or health carrier must not impose any prior authorization or step therapy requirement
or other limitation on coverage of the drug product with the lowest out-of-pocket cost to
the patient under the patient's health plan, or impose a restriction on a pharmacy that makes
it more difficult for the patient under the patient's health plan to obtain coverage of or access
to the drug product with the lowest out-of-pocket cost to the patient.
new text end

new text begin (b) A pharmacy benefit manager or health carrier must structure its formulary and any
formulary tiers for each health plan in a manner that gives preference to the brand name
biologic or the equivalent biosimilar that has the lowest out-of-pocket cost to the patient
purchasing the drug product. The pharmacy benefit manager or health carrier must not
impose any prior authorization or step therapy requirement or other limitation on coverage
of the drug product with the lowest out-of-pocket cost to the patient under the patient's
health plan, or impose a restriction on a pharmacy that makes it more difficult for the patient
under the patient's health plan to obtain coverage of or access to the drug product with the
lowest out-of-pocket cost to the patient.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025.
new text end