SF 2178

as introduced - 92nd Legislature (2021 - 2022) Posted on 07/16/2021 09:10am

A bill for an act
relating to health care; requiring the commissioner of management and budget to
use a reverse auction for the procurement of a pharmacy benefit manager to manage
and administer the prescription drug benefit for the State Employees Group
Insurance Program; proposing coding for new law in Minnesota Statutes, chapter
43A.

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

Section 1.

new text begin [43A.3165] PROCUREMENT OF A PHARMACY BENEFIT MANAGER
AND A PLATFORM TECHNOLOGY VENDOR.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Market check" means a technology-driven evaluation of prescription drug pricing
based on benchmarks derived from reverse auction processes conducted in the United States
over the immediately preceding 12 months.
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new text begin (c) "Pharmacy benefit management services" means:
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new text begin (1) the procurement of prescription drugs at a negotiated rate for dispensation within
the State Employees Group Insurance Program (SEGIP) to enrollees;
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new text begin (2) the administration and management of the prescription drug benefit under SEGIP;
and
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new text begin (3) any of the following services provided with regard to the administration and
management of the prescription drug benefit, including:
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new text begin (i) mail service pharmacy;
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new text begin (ii) claims processing, retail network management, and payment of claims to pharmacies
for prescription drugs dispensed to enrollees;
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new text begin (iii) supplemental rebate contracting and administration;
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new text begin (iv) patient compliance, therapeutic intervention, and generic substitution programs; or
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new text begin (v) disease management programs.
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new text begin (d) "Pharmacy benefit manager" has the meaning given in section 62W.02, subdivision
15, paragraph (a).
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new text begin (e) "Price" means the projected cost of a bid for providing pharmacy benefit management
services over the duration of the contract.
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new text begin (f) "Reverse auction" means an automated bidding process conducted online that starts
with an opening price and allows qualified bidders to counteroffer a lower price for multiple
rounds of bidding.
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new text begin (g) "SEGIP" is the State Employees Group Insurance Program under section 43A.316,
provided to participants eligible under section 43A.24.
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new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The purpose of this section is to optimize prescription drug savings
in SEGIP through:
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new text begin (1) contracting with a pharmacy benefit manager to manage and administer the
prescription drug benefit for SEGIP;
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new text begin (2) the adoption of a reverse auction process for the selection of a pharmacy benefit
manager;
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new text begin (3) providing a process for the electronic review and validation of pharmacy benefit
manager claims invoices for the purpose of reconciling pharmacy bills;
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new text begin (4) market checks of the pharmacy benefit manager's prescription drug pricing; and
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new text begin (5) limiting independent pharmacies from unsustainable reimbursement practices.
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new text begin Subd. 3. new text end

new text begin Procurement of a pharmacy benefit manager. new text end

new text begin (a) Notwithstanding any law
to the contrary, the commissioner of management and budget shall procure a contract for
the services of a pharmacy benefit manager to administer the prescription drug benefit and
pharmacy benefit management services for SEGIP participants, effective January 1, 2023.
new text end

new text begin (b) The commissioner shall conduct a reverse auction as described in this section to
select the pharmacy benefit manager.
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new text begin (c) In consultation with the technology platform vendor selected under subdivision 4
and any recommendations offered by the Formulary Committee under section 256B.0625,
subdivision 13c, the commissioner shall specify the terms of a participant bidding agreement
that all bidders must accept as a prerequisite for participation in the reverse auction process,
including:
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new text begin (1) common definitions;
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new text begin (2) prescription drug classifications;
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new text begin (3) retail pricing rules, including maximum allowable cost price lists and dispensing
fees; and
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new text begin (4) any other contract terms the commissioner deems necessary to further the purpose
of this section as specified under subdivision 2.
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new text begin (d) A pharmacy benefit manager that submits a bid under this subdivision must provide
the commissioner access to complete pharmacy claims data necessary for the commissioner
to conduct the reverse auction and to carry out administrative and management duties.
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new text begin (e) The terms of any contract entered into under this subdivision shall not be modified
by the pharmacy benefit manager except with the approval of the commissioner.
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new text begin (f) The commissioner may structure the contract awarded under this subdivision to pay
the cost of the technology platform and the associated professional services contracted for
under this subdivision by assessing a per-prescription fee to be paid directly by the pharmacy
benefit manager to the technology platform vendor.
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new text begin (g) The commissioner may perform annual market checks on pharmacy benefit manager
services performed by the pharmacy benefit manager during the term of the contract. A
market check performed under this paragraph may include an evaluation of the effect of
alternative drug pricing metrics, such as the national average drug acquisition cost and
average wholesale price, on the cost of prescription drugs and savings to the state.
new text end

new text begin (h) The commissioner shall make regular, periodic payment of invoices within the time
periods specified in the contract based on the automated adjudication of invoiced claims
using the technology platform to validate that claims payments comply with the terms of
the contract.
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new text begin Subd. 4. new text end

new text begin Technology platform vendor. new text end

new text begin (a) At least three months before the reverse
auction process is scheduled to be completed, the commissioner shall procure through a
competitive bidding process a contract with a professional services vendor for a technology
platform and any associated professional services necessary to operate the platform to:
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new text begin (1) evaluate the qualifications of prospective pharmacy benefit manager bidders for the
pharmacy benefit manager procurement;
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new text begin (2) automatically adjudicate prescription drug claims; and
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new text begin (3) collect data on pharmacy reimbursement.
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new text begin (b) The platform procured under paragraph (a) must have the capability to:
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new text begin (1) host and conduct an online automated reverse auction;
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new text begin (2) automate repricing of diverse and complex pharmacy benefit manager prescription
drug pricing proposals to enable direct comparisons of the price of bids using all annual
claims data available for the medical assistance program using code-based classification or
prescription drugs from nationally accepted drug sources;
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new text begin (3) produce an automated report and analysis of bids, including ranking of bids on the
comparative costs and qualitative aspects of the costs within 48 hours after the close of each
round of reverse auction bidding;
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new text begin (4) after the close of the reverse auction process, perform an electronic, line-by-line,
claim-by-claim review of all invoiced pharmacy benefit manager claims within 12 hours
of receipt that allows for an online comparison of pharmacy benefit manager invoices, an
audio of other services provided by the pharmacy benefit manager services, and identifies
all deviations from the specific terms of the services contract resulting from the reverse
auction; and
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new text begin (5) if available, after the close of the reverse auction process, perform comparisons of
the financial effects on the state of alternative drug pricing metrics, such as the national
average drug acquisition cost and average wholesale price.
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new text begin (c) The commissioner shall not award the platform technology vendor contract under
this subdivision to:
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new text begin (1) a pharmacy benefit manager;
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new text begin (2) a subsidiary or affiliate of a pharmacy benefit manager; or
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new text begin (3) a vendor that is managed by a pharmacy benefit manager or receives, directly or
indirectly, remuneration from a pharmacy benefit manager for aggregating clients into a
contractual relationship with a pharmacy benefit manager.
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new text begin (d) The vendor that is awarded the contract under this subdivision must not subcontract
any part of the reverse auction process or the review described under paragraph (b), clause
(4).
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