Pharmacy Benefit Managers, Gag Clauses & Drug Prices

MAFP legislative representative Dave Renner, CAE, shares an update on movement in the Minnesota Legislature to license pharmacy benefit managers, implement a pharmacist gag clause and regulate drug prices.

PBM Licensure Bill Heard in the MN Senate

Bill SF 278, authored by MAFP member, Senator Scott Jensen (R-Chaska), requires all pharmacy benefit managers (PBMs) operating in Minnesota to become licensed and report several items related to drug pricing. Read our introduction to the legislation.

This bill was heard in the Senate Health and Human Services Finance and Policy Committee on January 31, 2019. The Minnesota Medical Association (MMA) and MAFP testified in support of the bill.

As introduced, SF 278 included language that would have permitted pharmacists to change a prescription if the drug that was prescribed was not on the patient’s formulary or preferred drug list, as long as the substituted drug was in the same drug class. Senator Jensen accepted an amendment proposed by the MMA to allow a pharmacist to make this kind of substitution ONLY if he or she had a written protocol with a prescriber authorizing it. It was also further limited to drugs in the same generation and for the same indication.

The PBM industry and the Minnesota Chamber of Commerce opposed the legislation, and the chair committed that the bill will be taken up at a later date.

The House version of the bill (HF 728) was introduced on February 4, 2019, by MAFP member and Representative Alice Mann (DFL-Lakeville).

Pharmacist Gag Clause Considered in Committee

According to a bill heard in the House Health and Human Services Policy Committee last week, contracts between PBMs and pharmacies would be precluded from containing language prohibiting pharmacists from letting patients know that paying cash for a drug would be cheaper than using their insurance benefit.

The bill, authored by Representative Kristen Bahner (DFL – Maple Grove), passed and was referred to the House Commerce Committee. The Senate bill is authored by MAFP member Senator Scott Jensen (R – Chaska) and is expected to be heard in coming weeks.

Legislators Look to Target Drug Manufacturers

A high profile DFL proposal to tightly regulate price increases by drug manufacturers was the subject of a contentious hearing on February 7, 2019.

The bill, authored by Representative John Lesch (DFL-St. Paul), seeks to empower the state’s attorney general “to promote public health in Minnesota by preventing unconscionable price gouging with respect to the price of essential prescription drugs sold in Minnesota.”

It includes several provisions intended to authorize the attorney general to levy fines, designate “essential drugs” subject to additional protections and other consumer protections.

In the Senate, Senator Scott Jensen has also introduced legislation that requires more price disclosure for drugs where price increases are extreme.

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