Session Nears End, PBM Bill Moves

The Minnesota legislative session is two weeks away from concluding, but there is still A LOT of work to be done. Legislators and the Governor missed their self-imposed deadline (early May) to agree to overall budget targets on the major spending bills that would guide the work of the finance conference committees.
 
While the conference committees wait for the global spending targets, they have been holding open hearings to better understand the provisions in the differing bills. Hopefully, this will help make decisions on these bills go more quickly in the final days.

PBM Licensure Bill Passes the House

The MAFP legislative representative Dave Renner, CAE, provides an update on the bill to license pharmacy benefit managers (PBMs).

Even with the provision to increase transparency and accountability for PBMs included in the House Omnibus Health and Human Services bill, the House took another step toward its passage on May 9, 2019, by passing the language as a separate bill with a strong bipartisan vote.
 
Authored by MAFP member Representative Alice Mann, MD (DFL – Lakeville), SF 278 creates a new licensure requirement for any PBM operating in Minnesota.
 
As part of the licensing requirement, PBMs are required to annually report:

  • aggregate cost spent on wholesale drugs
  • aggregate amount of rebates received from drug manufacturers
  • any exclusive contracts with manufacturers
  • any difference between the amount charged to plan sponsors and the amount paid to pharmacies

The bill’s strong bipartisan support comes as many policy makers have been questioning the role of PBMs and whether they help control drug spending. 

The Senate version of the bill, authored by MAFP member Senator Scott Jensen, MD (R – Chaska), passed the upper chamber on a unanimous vote. 
 
The bill also includes several provisions designed to ensure patients can get their medications at the best price. Provisions include:

  • PBMs are prohibited from requiring enrollees to fill their prescriptions at a retail, mail order or specialty pharmacy for which the PBM has an ownership interest.
  • PBMs cannot prohibit pharmacies from telling enrollees that there may be a cheaper drug other than the covered drug available, called “gag clauses.” 
  • PBMs cannot require patients to pay a higher price if they elect to pay cash rather than use their health insurance. 

This new PMB regulation and transparency will likely be signed into law by Governor Tim Walz.

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