SF1806

Purpose

To limit how health plans manage prescription drug formularies during a plan year. The bill prohibits removing a drug from an enrollee’s formulary or moving it to a higher-cost category for the rest of the current plan year, with specific exceptions. It also establishes definitions and creates a new formal process for formulary changes.

Key Provisions

• Establishes a new section (62Q.83 Formulary Changes) within Minnesota law.
• Definitions (Subdivision 1): clarifies terms such as Drug, Enrollee, Formulary, Health plan, and Pharmacy Benefit Manager.
• Prohibition on formulary changes (Subdivision 2, Paragraph a): generally, health plans must not remove a drug that an enrollee was prescribed during the plan year, nor place that drug in a higher-cost category for the remainder of the plan year.
• Exceptions to the prohibition (Subdivision 2, Paragraph b):
  • The prohibition does not apply if a drug is deemed unsafe by the FDA, has been withdrawn by the FDA or the drug manufacturer, or if independent research or guidelines warn of patient harm related to the drug.
• Additional exception related to brand-name drugs (Subdivision 2, Paragraph c):
  • The prohibition does not apply if the plan removes a brand-name drug or places it in a higher-cost category but adds a generic or multisource brand-name drug that is therapeutically equivalent (per the FDA Orange Book) or a biologic that is interchangeable (per the FDA Purple Book) at a lower cost, provided the plan gives at least 60 days’ notice to prescribers, pharmacists, and affected enrollees.

Notable Changes to Existing Law

• Creates a formal limit on mid-year formulary changes, tying protections to continuity of care and costs for enrollees.
• Introduces specific cost-containment and substitution criteria centered on generics, multisource brands, and interchangeable biologics.
• Requires a 60-day notice window for certain formulary changes when substituting with lower-cost alternatives.

Definitions (Selected)

• Drug: as defined in section 151.01(5).
• Enrollee: as defined in section 62Q.01(2)(b).
• Formulary: current list of covered prescription drug products subject to periodic review.
• Health plan: as defined in section 62Q.01(3).
• Pharmacy benefit manager: as defined in section 62W.02(1).
• Prescription: as defined in section 151.01(16a).

Practical Impact

• Enrollees: greater protection from surprise, year-long cost increases and abrupt drug removals; more predictability in maintaining therapy.
• Prescribers and Pharmacists: receive longer advance notice for certain formulary changes (60 days) when substituting with lower-cost options.
• Health Plans and PBMs: must assess and implement formulary changes within the new framework, including when and how to substitute with equivalent lower-cost drugs.

Relevant Terms formulary; enrollee; health plan; drug; FDA; FDA Orange Book; FDA Purple Book; therapeutically equivalent; interchangeable; generic; brand-name drug; multisource brand-name drug; biologic; immune/interchangeable biologic; plan year; cost; notice; prescriber; pharmacist; safety; withdrawn; independent research; evidence-based standards.