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HF2714 (Legislative Session 94 (2025-2026))

Pharmacy benefit manager, technology platform, and data protection provisions modified relating to vendor contracts.

Related bill: SF3055

AI Generated Summary

Purpose of the Bill

This bill aims to improve how the Minnesota state government manages and oversees pharmacy benefits, with a focus on transparency, cost-efficiency, and data security in its contracts with pharmacy benefit managers (PBMs).

Main Provisions

  • Procurement Process for Pharmacy Benefit Managers: The bill requires using a reverse auction for selecting a pharmacy benefit manager. This process is designed to introduce competition, potentially reducing costs for the state by allowing multiple PBMs to submit competitive bids.

  • Technology Platform: The legislation mandates the procurement of a technology platform to support the reverse auction process. This platform must have the capabilities to automatically handle and verify prescription drug claims, which will help ensure the accuracy and fairness of the bidding process.

  • Data Security and Privacy: Agreements with technology vendors must include strong data protection measures. This includes preventing unauthorized data access, prohibiting the sale of data, and restricting data dissemination unless legally permitted.

  • Market Checks: The commissioner is directed to carry out annual market checks. These checks will evaluate various drug pricing models' effectiveness on saving costs for prescription drugs, thus maintaining fair pricing over time.

  • Separation of Duties: The platform provider cannot be a pharmacy benefit manager or related entity to avoid conflicts of interest. The vendor cannot subcontract any part of the auction or claim review processes.

Significant Changes to Existing Law

  • The bill makes the use of a reverse auction mandatory for PBM procurement, which is a change from traditional, potentially less competitive procurement methods.
  • Introduction of a technology platform specifically designed for automating and ensuring the integrity of the prescription drug claims process.
  • Imposes new data protection requirements to safeguard information processed during the procurement and management of pharmacy benefits.

Relevant Terms

pharmacy benefit manager, reverse auction, technology platform, data protection, privacy, prescription drug claims, competitive bidding.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 23, 2025HouseFloorActionIntroduction and first reading, referred toState Government Finance and Policy

Citations

 
[
  {
    "analysis": {
      "added": [
        "New rules for reverse auction process for selecting pharmacy benefit managers."
      ],
      "removed": [],
      "summary": "This legislation modifies provisions related to the procurement of a pharmacy benefit manager under section 43A.231.",
      "modified": [
        "Clarifies terms and conditions for pharmacy benefit manager contracts."
      ]
    },
    "citation": "43A.231",
    "subdivision": "subdivision 3"
  },
  {
    "analysis": {
      "added": [
        "Requirements for technology platform capabilities and security standards."
      ],
      "removed": [],
      "summary": "This legislation modifies the procurement process for a technology platform for pharmacy benefit manager services under section 43A.231.",
      "modified": [
        "Updates vendor qualifications and prohibits certain relationships with pharmacy benefit managers."
      ]
    },
    "citation": "43A.231",
    "subdivision": "subdivision 4"
  },
  {
    "analysis": {
      "added": [
        "Privacy protection procedures for data handling."
      ],
      "removed": [],
      "summary": "This legislation updates data protection requirements for technology platform vendors under section 43A.231.",
      "modified": [
        "Prohibitions on unauthorized data dissemination and sale."
      ]
    },
    "citation": "43A.231",
    "subdivision": "subdivision 6"
  }
]

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