HF 2242

as introduced - 94th Legislature (2025 - 2026) Posted on 03/24/2025 04:13pm

A bill for an act
relating to human services; requiring the commissioner of human services to select
a state pharmacy benefit manager through procurement; requiring the commissioner
of human services to enter into a master contract with the state pharmacy benefit
manager; specifying program authority and eligibility requirements; requiring a
report; amending Minnesota Statutes 2024, section 256B.69, subdivision 6d;
proposing coding for new law in Minnesota Statutes, chapter 256B.

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

Section 1.

Minnesota Statutes 2024, section 256B.69, subdivision 6d, is amended to read:

Subd. 6d.

Prescription drugs.

new text begin (a) new text end The commissioner may exclude or modify coverage
for prescription drugs from the prepaid managed care contracts entered into under this
section in order to increase savings to the state by collecting additional prescription drug
rebates.

new text begin (b) new text end The contracts must maintain incentives for the managed care plan to manage drug
costs and utilization and may require that the managed care plans maintain an open drug
formulary. In order to manage drug costs and utilization, the contracts may authorize the
managed care plans to use preferred drug lists and prior authorization. new text begin The contracts must
conform with section 256B.696.
new text end

new text begin (c) new text end This subdivision is contingent on federal approval of the managed care contract
changes and the collection of additional prescription drug rebates.

Sec. 2.

new text begin [256B.696] PRESCRIPTION DRUGS; STATE PHARMACY BENEFIT
MANAGER.
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.
new text end

new text begin (b) "Managed care plans" means health plans and county-based purchasing organizations
providing coverage to medical assistance and MinnesotaCare enrollees under the managed
care delivery system.
new text end

new text begin (c) "Managed care enrollees" means medical assistance and MinnesotaCare enrollees
receiving coverage from managed care plans.
new text end

new text begin (d) "State pharmacy benefit manager" means the pharmacy benefit manager selected
pursuant to the procurement process in subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Procurement process. new text end

new text begin (a) The commissioner must, through a competitive
procurement process in compliance with paragraph (b), select a single pharmacy benefit
manager to comply with the requirements set forth in subdivision 3.
new text end

new text begin (b) The commissioner must, when selecting the single pharmacy benefit manager, do
the following:
new text end

new text begin (1) accept applications for entities seeking to become the single pharmacy benefit
manager;
new text end

new text begin (2) establish eligibility criteria an entity must meet in order to become the single pharmacy
benefit manager; and
new text end

new text begin (3) enter into a master contract with a single pharmacy benefit manager.
new text end

new text begin (c) The contract required under paragraph (b), clause (3), must include a prohibition on
the single pharmacy benefit manager from requiring an enrollee to obtain a specialty drug
from a specialty pharmacy owned or otherwise affiliated with the single pharmacy benefit
manager.
new text end

new text begin (d) Applicants for the single pharmacy benefit manager must disclose to the commissioner
the following during the procurement process:
new text end

new text begin (1) any activity, policy, practice, contract, or arrangement of the single pharmacy benefit
manager that may directly or indirectly present any conflict of interest with the pharmacy
benefit manager's relationship with or obligation to the Department of Human Services, a
health plan company, or county-based purchasing organization;
new text end

new text begin (2) all common ownership, members of a board of directors, managers, or other control
of the pharmacy benefit manager or any of the pharmacy benefit manager's affiliated
companies with (i) a health plan company or an affiliate of a health plan company, (ii) a
county-based purchasing organization, (iii) an entity that contracts on behalf of a pharmacy
or any pharmacy services administration organization and its affiliates, (iv) a drug wholesaler
or distributor and its affiliates, (v) a third-party payer and its affiliates, or (vi) a pharmacy
and its affiliates;
new text end

new text begin (3) any direct or indirect fees, charges, or any kind of assessments imposed by the
pharmacy benefit manager on pharmacies licensed in this state with which the pharmacy
benefit manager shares common ownership, management, or control, or that are owned,
managed, or controlled by any of the pharmacy benefit manager's affiliated companies;
new text end

new text begin (4) any direct or indirect fees, charges, or any kind of assessments imposed by the
pharmacy benefit manager on pharmacies licensed in this state; and
new text end

new text begin (5) any financial terms and arrangements between the pharmacy benefit manager and a
prescription drug manufacturer or labeler, including formulary management, drug substitution
programs, educational support claims processing, or data sales fees.
new text end

new text begin Subd. 3. new text end

new text begin Drug coverage. new text end

new text begin (a) The commissioner must approve or disapprove all utilization
review limitations, requirements, and strategies imposed by managed care plans on
prescription drug coverage.
new text end

new text begin (b) The commissioner must approve or disapprove all reimbursement rates, fees, and
any other remuneration provided for drugs by managed care plans.
new text end

new text begin (c) The state pharmacy benefit manager is responsible for processing all pharmacy claims
under the managed care delivery system. Managed care plans must use the state pharmacy
benefit manager pursuant to the terms of the master contract required under subdivision 2,
paragraph (b), clause (3). The pharmacy benefit manager selected is the exclusive pharmacy
benefit manager used by health plan companies and county-based purchasing organizations
when providing coverage to enrollees.
new text end

new text begin (d) All payment arrangements between the Department of Human Services, managed
care plans, and the state pharmacy benefit manager must comply with state and federal
statutes, regulations adopted by the Centers for Medicare and Medicaid Services, and any
other agreement between the department and the Centers for Medicare and Medicaid Services.
The commissioner may change a payment arrangement to comply with this paragraph.
new text end

new text begin (e) The commissioner must administer and oversee this section to:
new text end

new text begin (1) make prescription drugs available at the lowest possible cost to managed care
enrollees;
new text end

new text begin (2) promote health through discounted prescription drugs and coordination of
comprehensive prescription benefit services for managed care enrollees;
new text end

new text begin (3) ensure proper administration of prescription drug benefits for managed care enrollees;
and
new text end

new text begin (4) increase the transparency of prescription drug prices and other information for the
benefit of pharmacies.
new text end

new text begin Subd. 4. new text end

new text begin Prescription drug disclosures. new text end

new text begin (a) The state pharmacy benefit manager must,
on request from the commissioner, disclose to the commissioner all sources of payment it
receives for prescribed drugs, including any financial benefits including drug rebates,
discounts, credits, clawbacks, fees, grants, chargebacks, reimbursements, or other payments
related to services provided for a managed care plan.
new text end

new text begin (b) Each managed care plan must disclose to the commissioner, in the format specified
by the commissioner, the entity's administrative costs associated with providing pharmacy
services under the managed care delivery system.
new text end

new text begin (c) The state pharmacy benefit manager must provide a written quarterly report to the
commissioner containing the following information from the immediately preceding quarter:
new text end

new text begin (1) the prices the state pharmacy benefit manager negotiated for prescribed drugs under
the managed care delivery system. The price must include any rebates the state pharmacy
benefit manager received from the drug manufacturer;
new text end

new text begin (2) the prices the state pharmacy benefit manager paid to pharmacies for prescribed
drugs;
new text end

new text begin (3) any rebate amounts the state pharmacy benefit manager passed on to individual
pharmacies;
new text end

new text begin (4) the percentage of savings in drug prices passed on to managed care enrollees;
new text end

new text begin (5) the information described in subdivision 2, paragraph (d); and
new text end

new text begin (6) any other information required by the commissioner.
new text end

new text begin (d) The commissioner may request and collect additional information and clinical data
from the state pharmacy benefit manager.
new text end

new text begin (e) At the time of contract execution, renewal, or modification, the commissioner must
modify the reporting requirements under its managed care contracts as necessary to meet
the requirements of this subdivision.
new text end

new text begin Subd. 5. new text end

new text begin Program authority. new text end

new text begin (a) To accomplish the requirements of subdivision 3,
paragraph (e), the commissioner, in consultation with the Formulary Committee established
under section 256B.0625, subdivision 13c, has the authority to:
new text end

new text begin (1) adopt or develop a preferred drug list for managed care plans;
new text end

new text begin (2) at the commissioner's discretion, engage in price negotiations with prescription drug
manufacturers, wholesalers, or group purchasing organizations in place of the state pharmacy
benefit manager to obtain price discounts and rebates for prescription drugs for managed
care enrollees; and
new text end

new text begin (3) develop and manage a drug formulary for managed care plans.
new text end

new text begin (b) The commissioner may contract with one or more entities to perform any of the
functions described in paragraph (a).
new text end

new text begin Subd. 6. new text end

new text begin Pharmacies. new text end

new text begin The commissioner may review contracts between the state
pharmacy benefit manager and pharmacies for compliance with this section and the master
contract required under subdivision 2, paragraph (b), clause (3). The commissioner may
amend any term or condition of a contract that does not comply with this section or the
master contract.
new text end

new text begin Subd. 7. new text end

new text begin Federal approval. new text end

new text begin The commissioner must seek any necessary federal approvals
to implement this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2027, or upon federal approval,
whichever is later. The commissioner of human services shall notify the revisor of statutes
when federal approval is obtained.
new text end