Reverse auction procurement requirement for SEGIP pharmacy benefit contracts modified, use of spread pricing by pharmacy benefit managers prohibited, license application fees increased, fiduciary duties imposed, and money appropriated.
Impact
The implications of HF2851 extend to how prescription drugs are priced and how pharmacy benefit managers operate in Minnesota. By banning spread pricing, which allows PBMs to charge different prices for drugs than they pay pharmacies, the legislation is positioned to introduce greater price transparency and potentially decrease drug costs for consumers. Furthermore, by raising application fees, the bill ensures that only adequately funded PBMs can operate, thereby maintaining a higher standard of management in pharmacy benefits and reducing conflicts of interest.
Summary
House File 2851 (HF2851) aims to modify the procurement requirements for pharmacy benefit contracts under the State Employee Group Insurance Program (SEGIP). It notably prohibits the use of spread pricing by pharmacy benefit managers (PBMs), which has been a significant concern due to its potential to inflate medication costs for consumers and insurers. The bill also seeks to increase the licensing application fees for PBMs, imposes fiduciary duties, and allocates state funds for enforcement efforts related to these regulations.
Contention
There may be concerns surrounding how HF2851 could affect the complexity of pharmaceutical pricing and the relationships between PBMs, pharmacies, and patients. Critics may argue that increasing operating costs through higher fees could lead to increased drug prices or reduced competition in the pharmaceutical marketplace. Moreover, while proponents argue for the ethical responsibilities placed on PBMs, the enforcement of fiduciary duties could present challenges in compliance and oversight, potentially leading to additional regulatory burdens.
Pharmacy benefit manager business practices modified, pharmacy benefit manager general reimbursement practices established, and maximum allowable cost pricing requirements modified.
Commissioner of human services required to establish directed pharmacy dispensing payment to improve and maintain access to pharmaceutical services, and money appropriated.
Pharmacy benefit managers and health carriers required to use prescription drug rebates and other compensation to benefit covered persons, and report required.
Procedure for sanctions modified, Department of Human Services background studies modified, applications and application process modified, license fees modified, commissioner access to recipient medical records modified, notice requirements for monetary recovery and sanctions modified, administrative reconsideration process modified, licensing data modified, email address privacy modified, and prone restraints in licensed or certified facilities prohibited.