1.1 A bill for an act
1.2 relating to health; requiring pharmacy benefit managers and health carriers to
1.3 include lower-cost drugs in their formularies; requiring formulary structure and
1.4 formulary tiering for each health plan to give preference to the drug with the lowest
1.5 out-of-pocket cost to the patient; proposing coding for new law in Minnesota
1.6 Statutes, chapter 62W.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. [62W.16] INCLUSION OF LOWER-COST DRUGS IN FORMULARY.
1.9 Subdivision 1.Definitions.(a) For purposes of this section, the following definitions
1.10apply.
1.11 (b) "Biologic" has the meaning provided in section 62J.86, subdivision 3.
1.12 (c) "Biosimilar" has the meaning provided in section 62J.84, subdivision 2, paragraph
1.13(b).
1.14 (d) "Brand name drug" has the meaning provided in section 62J.84, subdivision 2,
1.15paragraph (c).
1.16 (e) "Equivalent" means:
1.17 (1) with respect to a generic drug, the brand name drug against which the generic drug
1.18is evaluated by the United States Food and Drug Administration under United States Code,
1.19title 21, section 355(j); and
1.20 (2) with respect to a biosimilar, the brand name drug biological product as defined in
1.21United States Code, title 42, section 262(i).
1Section 1.
REVISOR SGS/BM 25-0240201/16/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1076
NINETY-FOURTH SESSION
Authored by Elkins02/17/2025
The bill was read for the first time and referred to the Committee on Health Finance and Policy 2.1 (f) "Generic drug" has the meaning provided in section 62J.84, subdivision 2, paragraph
2.2(e).
2.3 (g) "Health plan" means a policy, contract, certificate, or agreement defined in section
2.462A.011, subdivision 3.
2.5 (h) "Out-of-pocket cost" means any coinsurance, co-payment, or other form of
2.6cost-sharing for which a patient is responsible.
2.7 (i) "Wholesale acquisition cost" has the meaning provided in section 62J.86, subdivision
2.811.
2.9 Subd. 2.Brand name, generic, and biosimilar drugs; inclusion of lowest-cost drug
2.10in formulary.(a) If a pharmacy benefit manager or health carrier includes in its formulary
2.11a brand name drug, it must also include in its formulary, if applicable, the equivalent generic
2.12drug that has a wholesale acquisition cost that is lower than:
2.13 (1) the wholesale acquisition cost of the brand name drug; and
2.14 (2) the wholesale acquisition cost of any other equivalent generic drug.
2.15 (b) If a pharmacy benefit manager or health carrier includes in its formulary a generic
2.16drug, it must also include in its formulary, if applicable, the brand name drug to which the
2.17generic drug is equivalent, if the brand name drug has a wholesale acquisition cost that is
2.18lower than:
2.19 (1) the wholesale acquisition cost of the generic drug included in the formulary; and
2.20 (2) the wholesale acquisition cost of any other equivalent generic drug.
2.21 (c) If a pharmacy benefit manager or health carrier includes in its formulary a brand
2.22name biologic, it must also include in its formulary, if applicable, the equivalent biosimilar
2.23that has a wholesale acquisition cost that is lower than:
2.24 (1) the wholesale acquisition cost of the brand name biologic; and
2.25 (2) the wholesale acquisition cost of any other equivalent biosimilar.
2.26 (d) If a pharmacy benefit manager or health carrier includes in its formulary a biosimilar,
2.27it must also include in its formulary, if applicable, the brand name biologic to which the
2.28biosimilar is equivalent, if the brand name biologic has a wholesale acquisition cost that is
2.29lower than:
2.30 (1) the wholesale acquisition cost of the biosimilar included in the formulary; and
2.31 (2) the wholesale acquisition cost of any other equivalent biosimilar.
2Section 1.
REVISOR SGS/BM 25-0240201/16/25 3.1 Subd. 3.New generic and biosimilar drugs; inclusion of lowest-cost drug in
3.2formulary.(a) If a generic drug is approved by the United States Food and Drug
3.3Administration, is marketed pursuant to that approval, and has a wholesale acquisition cost
3.4that is less than the brand name drug or generic drug with the lowest wholesale acquisition
3.5cost already included in the formulary of a pharmacy benefit manager or health carrier, the
3.6pharmacy benefit manager or health carrier must immediately make the newly approved
3.7generic drug available on its formulary.
3.8 (b) If a biosimilar is approved by the United States Food and Drug Administration, is
3.9marketed pursuant to that approval, and has a wholesale acquisition cost that is less than
3.10the brand name biologic or biosimilar with the lowest wholesale acquisition cost already
3.11included in the formulary of a pharmacy benefit manager or health carrier, the pharmacy
3.12benefit manager or health carrier must immediately make the newly approved biosimilar
3.13available on its formulary.
3.14 Subd. 4.Formulary structure and tiering.(a) A pharmacy benefit manager or health
3.15carrier must structure its formulary and any formulary tiers for each health plan in a manner
3.16that gives preference to the brand name drug or the equivalent generic drug that has the
3.17lowest out-of-pocket cost to the patient purchasing the drug product. The pharmacy benefit
3.18manager or health carrier must not impose any prior authorization or step therapy requirement
3.19or other limitation on coverage of the drug product with the lowest out-of-pocket cost to
3.20the patient under the patient's health plan, or impose a restriction on a pharmacy that makes
3.21it more difficult for the patient under the patient's health plan to obtain coverage of or access
3.22to the drug product with the lowest out-of-pocket cost to the patient.
3.23 (b) A pharmacy benefit manager or health carrier must structure its formulary and any
3.24formulary tiers for each health plan in a manner that gives preference to the brand name
3.25biologic or the equivalent biosimilar that has the lowest out-of-pocket cost to the patient
3.26purchasing the drug product. The pharmacy benefit manager or health carrier must not
3.27impose any prior authorization or step therapy requirement or other limitation on coverage
3.28of the drug product with the lowest out-of-pocket cost to the patient under the patient's
3.29health plan, or impose a restriction on a pharmacy that makes it more difficult for the patient
3.30under the patient's health plan to obtain coverage of or access to the drug product with the
3.31lowest out-of-pocket cost to the patient.
3.32 EFFECTIVE DATE.This section is effective January 1, 2026.
3Section 1.
REVISOR SGS/BM 25-0240201/16/25