SF3055

Purpose of the Bill

The bill aims to revise how the state of Minnesota manages pharmacy benefit services. It focuses on improving the procurement processes for pharmacy benefit managers (PBMs), enhancing transparency and competition through technology-driven solutions, and safeguarding data involved in these processes.

Main Provisions

1. Procurement of Pharmacy Benefit Managers:

   • The Minnesota commissioner of management and budget is tasked with procuring contracts for PBMs to manage prescription drug benefits using a process called a reverse auction starting from January 1, 2023.
   • The commissioner may separate the services of prescription drug benefits and pharmacy benefit management if desired.

2. Reverse Auction Process:

   • A reverse auction will be conducted to select PBMs, wherein vendors compete by offering lower pricing.
   • Bidders are required to accept a participant bidding agreement, detailing pricing rules, contract terms, and other required provisions.
   • The reverse auction process mandates transparency and competition in PBM selection.

3. Technology Platform:

   • A technology platform will be procured to facilitate these auctions, adjudicate claims, and gather data on pharmacy reimbursements.
   • The platform must ensure high standards for data security and performance, and undergo validation through recognized certifications.

4. Data Protection:

   • The agreements with technology vendors must include strict privacy protections, prohibitions on unauthorized access or sale of data, and limits on data dissemination unless legally authorized.

5. Vendor and Service Details:

   • The platform vendor cannot be a PBM or financially connected to one.
   • The contracts emphasize automated, real-time processing of claims to ensure compliance with contract terms.
   • An annual market check will be performed to review PBM services.

Significant Changes

• Introduction of Reverse Auctions: This is a significant shift aimed at reducing costs by increasing competition among PBMs.
• Data and Technology Focus: Emphasizes the use of technology for transparency and efficiency, incorporating stringent data protection measures.
• Separation of Services: Allows flexibility in the management and provision of prescription drug and benefit management services.

Relevant Terms

• Pharmacy Benefit Manager (PBM)
• Reverse Auction
• Technology Platform
• Data Protection
• Prescription Drug Pricing
• Pharmacy Claims
• Privacy Protections