Purpose of the Bill

The bill aims to update the process and technology used by the State of Minnesota for procuring pharmacy benefit managers (PBMs) to enhance the management of prescription drug benefits. It seeks to ensure transparency, cost-effectiveness, and data protection in the administration of these benefits.

Main Provisions

• Pharmacy Benefit Manager Procurement: The bill mandates that the Commissioner of Management and Budget must use a reverse auction process for selecting pharmacy benefit managers. This process involves bidders competing by lowering their prices, ensuring cost efficiency.

• Separate Service Management: For future procurements, the option is given to manage prescription drug benefits separately from overall medical benefits. This change allows more tailored and efficient management without requiring a single PBM for all services.

• Technology Platform Acquisition: A contract must be procured for a technology platform designed to support the reverse auction process. This platform should facilitate the evaluation of bids, manage pharmacy claims, and ensure data security.

• Data Protection: Contracts with technology vendors must include stringent data protection measures, such as preventing unauthorized access and prohibiting the sale or dissemination of data.

Significant Changes to Existing Law

• Introduction of Reverse Auctions: Unlike previous methods, the bill requires using reverse auctions to procure PBM services, potentially reducing state costs through competitive bidding.

• Data Security and Vendor Restrictions: The bill imposes new restrictions to ensure that technology vendors handling PBM data maintain high standards of security and are not affiliated with PBMs themselves.

• Regular Market Checks: There is a requirement for annual market checks on PBM services to evaluate alternative pricing impacts and ensure cost savings, ensuring continued scrutiny and adaptation to market conditions.

Relevant Terms

reverse auction, pharmacy benefit manager (PBM), technology platform, data protection, prescription drug benefit, cost-efficiency, vendor contracts, procurement process, data security, pharmacy claims, market checks.