HF5156

Purpose

• Establish a framework in Minnesota to set and apply a maximum fair price for certain prescription drugs that are eligible for the Medicare Drug Price Negotiation Program.
• Align how drugs are paid for by health plans and pharmacy benefit managers (PBMs) with the maximum fair price plus standard fees.
• Create transparency requirements for financial details related to these drugs and empower a state board to determine savings and oversee affordability.

Main Provisions

• Definitions (Subd.1)

  • Key terms defined: maximum fair price (the price set by federal rules for these drugs), NADAC (national average drug acquisition cost), referenced drug (drug subject to the price limit), manufacturer, and pharmacy benefit manager.
  • Establishes that the program applies to drugs subject to the Medicare price negotiation rules and links to Minnesota statutes.

• Maximum fair price requirements (Subd.2)

  • Manufacturers: cannot sell a referenced drug in Minnesota for more than the maximum fair price plus any dispensing fees and provider administration fees.
  • Health plans and PBMs: cannot reimburse pharmacies for a referenced drug at less than the greater of the maximum fair price or NADAC plus the dispensing fee.
  • Dispensing fees: a pharmacy may still receive dispensing fees that exceed the maximum fair price, but the price paid by plans/PBMs must respect the price floor/ceiling described above.
  • Reporting to Prescription Drug Affordability Board (PDAB): upon request, health plans and PBMs must provide detailed financial information, including administrative/management fees, rebates, network access fees, shared savings programs, and the exact payment details (ingredient cost and any dispensing fees). All data must align with Minnesota data rules.

• Prohibition on withdrawing a drug from sale (Subd.3)

  • Manufacturers may not pull a referenced drug from sale in the state to avoid price limitations unless they provide 180 days’ written notice to the commissioner of health.
  • Penalty for withdrawal: if a manufacturer withdraws a referenced drug in violation, the commissioner must impose a civil penalty equal to the greater of $100,000 or the total annual savings for that drug as determined by the PDAB.

• Administrative and oversight changes

  • Creates a formal process for price transparency and data sharing with the PDAB.
  • Establishes enforcement mechanisms and penalties to keep manufacturers from evading price limits.

Significant Changes to Existing Law

• Adds a new price-control framework for certain prescription drugs to Minnesota Statutes (chapter 62Q) tied to the federal Medicare Drug Price Negotiation Program.
• Requires health plans and PBMs to align reimbursements with the maximum fair price or NADAC plus dispensing fees, potentially changing how pharmacies are paid.
• Introduces mandatory data disclosure to the PDAB, increasing state-level oversight of drug pricing and related costs.
• Creates penalties for drug withdrawal aimed at evading price limits, providing a compliance incentive for manufacturers.

Potential Impacts

• Manufacturers may be constrained in how they price and distribute referenced drugs in Minnesota and could face penalties for noncompliance.
• Health plans, PBMs, and pharmacies may need to adjust reimbursement practices and reporting processes to satisfy the maximum fair price and data disclosure requirements.
• Patients could benefit from more predictable drug pricing within Minnesota, depending on how the maximum fair price compares to current prices and reimbursement practices.

Relevant context terms are incorporated in the sections above to reflect how the bill defines and uses key concepts such as maximum fair price, NADAC, referenced drug, dispensing fees, provider administration fees, health plan, PBM, and the Prescription Drug Affordability Board.

Relevant Terms - maximum fair price - NADAC (national average drug acquisition cost) - referenced drug - manufacturer - pharmacy benefit manager (PBM) - dispensing fee - provider administration fee - health plan - Prescription Drug Affordability Board (PDAB) - 62J.87, 62J.91 (data requirements) - Medicare Drug Price Negotiation Program - data disclosure/financial information - withdrawal from sale - civil penalty