1.1 A bill for an act
1.2 relating to health; requiring pharmacy benefit managers and health carriers to use
1.3 prescription drug rebates and other compensation to benefit covered persons;
1.4 requiring a report; proposing coding for new law in Minnesota Statutes, chapter
1.5 62W.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [62W.16] RESPONSIBILITY TO USE COMPENSATION FOR BENEFIT
1.8OF COVERED PERSONS.
1.9 Subdivision 1.Compensation used to reduce point-of-sale costs.(a) Except as provided
1.10in paragraph (b), a pharmacy benefit manager or health carrier must remit all compensation
1.11received from a drug manufacturer related to its prescription drug benefit directly to the
1.12covered person associated with a particular prescription drug, at the point of sale, to reduce
1.13the covered person's out-of-pocket cost for that prescription drug.
1.14 (b) A pharmacy benefit manager or health carrier is not required to remit all compensation
1.15as required by paragraph (a), if the covered person's cost-sharing obligation for a particular
1.16drug is less than what the person's out-of-pocket cost for that drug would be after application
1.17of paragraph (a). All compensation retained by the pharmacy benefit manager or health
1.18carrier under this paragraph must be applied by that entity in its plan design to offset future
1.19premiums or costs for covered persons.
1.20 (c) State employee group insurance program contracts with pharmacy benefit managers,
1.21including but not limited to contracts under section 43A.231, must require pharmacy benefit
1.22manager compliance with this section.
1.23 Subd. 2.Definitions.(a) For purposes of this section, the following definitions apply.
1Section 1.
S1877-1 1st EngrossmentSF1877 REVISOR SGS
SENATE
STATE OF MINNESOTA
S.F. No. 1877NINETY-FOURTH SESSION
(SENATE AUTHORS: MANN)
OFFICIAL STATUSD-PGDATE
Introduction and first reading55202/27/2025
Referred to Commerce and Consumer Protection
Comm report: To pass as amended and re-refer to Health and Human Services03/13/2025 2.1 (b) "Compensation" means any direct or indirect financial benefit, including but not
2.2limited to rebates, discounts, credits, fees, grants, chargebacks, or other payments or benefits
2.3of any kind.
2.4 (c) "Cost-sharing obligation" means a covered person's co-payment or coinsurance for
2.5a particular prescription drug.
2.6 Subd. 3.Report on compliance.Beginning March 1, 2026, and each March 1 thereafter,
2.7a pharmacy benefit manager or health carrier shall file with the commissioner a report, in
2.8the form and manner specified by the commissioner, demonstrating how the pharmacy
2.9benefit manager or health carrier has complied with this section.
2.10 Subd. 4.Exception.This section does not apply to a pharmacy benefit manager or health
2.11carrier if the covered person's cost-sharing obligation is equal to or less than:
2.12 (1) $25 for a generic drug; and
2.13 (2) $55 for a brand name drug.
2.14 EFFECTIVE DATE.This section is effective January 1, 2026.
2Section 1.
S1877-1 1st EngrossmentSF1877 REVISOR SGS