1.1 A bill for an act
1.2 relating to state government; changing provisions covering technology platform,
1.3 pharmacy benefit manager, and data protection in vendor contracts; amending
1.4 Minnesota Statutes 2024, section 43A.231, subdivisions 3, 4, 6.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2024, section 43A.231, subdivision 3, is amended to read:
1.7 Subd. 3.Procurement of a pharmacy benefit manager.(a) Notwithstanding any law
1.8to the contrary, the commissioner of management and budget shall procure a contract for
1.9the services of a pharmacy benefit manager to administer the prescription drug benefit and
1.10pharmacy benefit management services, effective January 1, 2023. For subsequent
1.11procurements, if the commissioner intends to separate prescription drug benefit and pharmacy
1.12benefit management services into multiple vendors or intends to fold prescription drug
1.13benefits into the overall medical benefit, rather than a single full-service pharmacy benefit
1.14manager, this section shall not apply.
1.15 (b) For the contract effective January 1, 2023, the commissioner shall conduct a reverse
1.16auction as described in this section to select the pharmacy benefit manager and use a reverse
1.17auction for procurement of subsequent pharmacy benefit manager contracts as provided in
1.18subdivision 5, paragraph (b).
1.19 (c) In consultation with the technology platform vendor selected under subdivision 4,
1.20the commissioner shall specify the terms of a participant bidding agreement that all bidders
1.21must accept as a prerequisite for participation in the reverse auction process, including:
1.22 (1) common definitions;
1Section 1.
25-00401 as introduced12/11/24 REVISOR EB/DG
SENATE
STATE OF MINNESOTA
S.F. No. 3055NINETY-FOURTH SESSION
(SENATE AUTHORS: MANN)
OFFICIAL STATUSD-PGDATE
Introduction and first reading03/27/2025
Referred to State and Local Government 2.1 (2) prescription drug classifications;
2.2 (3) retail pricing rules, including maximum allowable cost price lists and dispensing
2.3fees; and
2.4 (4) any other contract terms the commissioner deems necessary to further the purpose
2.5of this section as specified under subdivision 2.
2.6 (d) A pharmacy benefit manager who submits a bid under this subdivision must provide
2.7the commissioner access to complete pharmacy claims data necessary for the commissioner
2.8to conduct the reverse auction and to carry out administrative and management duties.
2.9 (e) The terms of a contract entered into under this subdivision shall not be modified by
2.10the pharmacy benefit manager except with the approval of the commissioner.
2.11 (f) The commissioner may structure the contract awarded under this subdivision to pay
2.12the cost of the technology platform and the associated professional services contracted for
2.13under this subdivision by assessing a fee per prescription to be paid directly by the pharmacy
2.14benefit manager to the technology platform vendor.
2.15 (g) The commissioner must perform annual market checks on pharmacy benefit manager
2.16services performed by the pharmacy benefit manager during the term of the contract. A
2.17market check performed under this paragraph may include an evaluation of the effect of
2.18alternative drug pricing metrics, such as the national average drug acquisition cost and
2.19average wholesale price, on the cost of prescription drugs and savings to the state.
2.20 (h) The commissioner shall make regular, periodic payment of invoices within the time
2.21periods specified in the contract based on the automated adjudication of invoiced claims
2.22using the technology platform to validate that claims payments comply with the terms of
2.23the contract.
2.24 (i) The joint labor-management committee on health plans shall assist in the process
2.25through which the commissioner conducts the reverse auction, evaluation, and comparison
2.26of the competing pharmacy benefit manager bids for award of the contract.
2.27 Sec. 2. Minnesota Statutes 2024, section 43A.231, subdivision 4, is amended to read:
2.28 Subd. 4.Technology platform.(a) At least three months before the reverse auction
2.29process is scheduled to be completed, The commissioner shall procure through a competitive
2.30bidding process a contract with a professional services vendor for a technology platform
2.31and any associated professional services necessary to operate the platform to:
2Sec. 2.
25-00401 as introduced12/11/24 REVISOR EB/DG 3.1 (1) evaluate the qualifications of prospective pharmacy benefit manager bidders for the
3.2pharmacy benefit manager procurement;
3.3 (2) automatically adjudicate prescription drug claims; and
3.4 (3) collect data on pharmacy reimbursement.
3.5 (b) The platform procured under paragraph (a) must have the following capabilities to
3.6ensure optimal performance of the reverse auction and security of data:
3.7 (1) host and conduct an online automated reverse auction:
3.8 (i) using a software application and high-performance data infrastructure to intake,
3.9cleanse, and normalize pharmacy benefit manager data; and
3.10 (ii) with development methods and information security standards that have been validated
3.11by receiving Service Organization Control 2 (SOC 2) and National Institute of Standards
3.12and Technology certification;
3.13 (2) automate repricing of diverse and complex pharmacy benefit manager prescription
3.14drug pricing proposals to enable direct comparisons of the price of bids using all annual
3.15claims data available for the program using code-based classification or prescription drugs
3.16from nationally accepted drug sources;
3.17 (3) simultaneously evaluate, within six hours, diverse and complex multiple proposals
3.18from full-service pharmacy benefit managers that shall include at least guaranteed net cost,
3.19Average Wholesale Price and National Average Drug Acquisition Cost (NADAC) pricing
3.20models, as well as proposals from pharmacy benefit administrators and specialty drug and
3.21rebate carve-out services providers; and
3.22 (4) produce an automated report and analysis of bids, including ranking of bids on the
3.23comparative costs and qualitative aspects of the costs within six hours after the close of
3.24each round of reverse auction bidding; and.
3.25 (5) after the close of the reverse auction process, perform an electronic, line-by-line,
3.26claim-by-claim review of all invoiced pharmacy benefit manager claims within six hours
3.27of receipt that allows for an online comparison of pharmacy benefit manager invoices and
3.28identifies all deviations from the specific terms of the services contract resulting from the
3.29reverse auction.
3.30 (c) The commissioner may require additional capabilities or more rigorous standards
3.31than those specified in paragraph (b).
3Sec. 2.
25-00401 as introduced12/11/24 REVISOR EB/DG 4.1 (d) The commissioner shall not award the platform technology vendor contract under
4.2this subdivision to:
4.3 (1) a pharmacy benefit manager;
4.4 (2) a subsidiary or affiliate of a pharmacy benefit manager; or
4.5 (3) a vendor who is managed by a pharmacy benefit manager or who receives, directly
4.6or indirectly, remuneration from a pharmacy benefit manager for aggregating clients into
4.7a contractual relationship with a pharmacy benefit manager.
4.8 (e) The vendor who is awarded the contract under this subdivision must not subcontract
4.9any part of the reverse auction process or the review described under paragraph (b), clause
4.10(5) The commissioner shall also hire a vendor to perform an electronic, line-by-line,
4.11claim-by-claim review of all invoiced pharmacy benefit manager claims that allows for an
4.12online comparison of pharmacy benefit manager invoices and identifies all deviations from
4.13the specific terms of the services contract resulting from the reverse auction. The claim
4.14review vendor and the platform vendor may be the same or they may be distinct.
4.15 Sec. 3. Minnesota Statutes 2024, section 43A.231, subdivision 6, is amended to read:
4.16 Subd. 6.Data protections.The commissioner of management and budget may only
4.17enter into an agreement with a technology platform vendor vendors under this section if the
4.18agreement provides agreements provide privacy protections for data collected and maintained
4.19by the technology platform vendor vendors, including:
4.20 (1) procedures for the prevention of unauthorized access or use;
4.21 (2) a prohibition on the sale of data collected and maintained as provided in the
4.22agreement; and
4.23 (3) a prohibition on dissemination of data unless authorized by state or federal law or
4.24the agreement.
4Sec. 3.
25-00401 as introduced12/11/24 REVISOR EB/DG