This bill proposes the establishment of a State Pharmacy Benefit Manager (PBM) in Minnesota to manage prescription drug coverage for enrollees of Medical Assistance (Medicaid) and MinnesotaCare within the managed care system. The bill seeks to increase cost savings, transparency, and efficiency in the state's prescription drug program.

Key Provisions:

1. State Pharmacy Benefit Manager Selection

   • The Commissioner of Human Services must select a single PBM through a competitive procurement process.
     
   • Eligible candidates must disclose potential conflicts of interest and financial relationships with manufacturers, wholesalers, and pharmacies.
     

2. PBM Contract & Restrictions

   • The PBM cannot require enrollees to obtain specialty drugs from a pharmacy owned or affiliated with the PBM.
     
   • The PBM must disclose all sources of revenue, including rebates and discounts received from drug manufacturers.

3. Prescription Drug Coverage Oversight

   • The Commissioner of Human Services will approve or disapprove drug reimbursement rates, utilization review policies, and formulary decisions of managed care plans.
     
   • The state PBM is responsible for processing all pharmacy claims under the managed care system.
     
   • The goal is to lower drug costs for enrollees while promoting transparency in drug pricing.

4. Reporting & Transparency

   • The PBM must submit quarterly reports to the commissioner, detailing drug prices, rebates, and pharmacy reimbursements.
     
   • Managed care plans must report their administrative costs for providing pharmacy services.

5. Authority of the Commissioner

   • The Commissioner may develop a preferred drug list, negotiate drug prices, and manage formularies for managed care plans.
     
   • The Commissioner can review and amend contracts to ensure compliance with the new system.

6. Federal Compliance & Approval

   • The bill requires federal approval to implement the changes.

Purpose of the Bill

• Increase Cost Savings: By centralizing PBM services, the state aims to reduce drug costs and collect more rebates from manufacturers.
  
• Enhance Transparency: Eliminates hidden fees, increases reporting requirements, and ensures rebates benefit enrollees rather than PBMs.
  
• Improve Oversight: The state takes a stronger role in regulating how managed care plans handle prescription drugs.
  

Next Steps

• The bill was referred to the Committee on Health Finance and Policy for further review.