Minnesota Legislature backs bill aimed at lower drug costs

Published 6:24 pm Thursday, May 16, 2019

ST. PAUL — The Minnesota Legislature on Thursday approved the final version of a bill designed to ensure that pharmacy benefit managers — the companies that act as middlemen between insurers and patients — fulfill their intended role of holding down drug expenses.

At the same time, Gov. Tim Walz and top House Democrats and Senate Republicans gave few clues as to where things stood in their efforts to wrap up a budget deal. Lawmakers need to pass the big budget bills of the session by Monday night’s adjournment deadline. If they can’t, the Democratic governor will have to call a special session.

“I got a haircut for the occasion so this is it.” Walz quipped as he headed into the closed-door talks Thursday afternoon. The negotiations have continued into the wee hours most nights this week.

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The Senate passed the pharmacy benefit manager legislation unanimously, 67-0, before the House sent it to Walz for his signature on a 130-2 vote. It marked an important bipartisan success for a session that has seen fewer than leaders had hoped when Walz took office and lawmakers convened in January. Minnesota has the country’s only legislature in which Democrats control one chamber while Republicans lead the other.

The bill will “shine a bright light” on pharmacy benefit managers, known as PBMs, to help find out why rebates that drug makers pay to the middlemen don’t always make it down to patients and how their business practices hurt small pharmacies, said Chaska Republican Scott Jensen, a physician who was the chief Senate author.

The country’s largest PBMs include Express Scripts, CVS Health, and OptumRx. During the Legislature’s debate over the past several weeks, critics accused them of sometimes causing price increases.

Besides its licensing and transparency requirements, the bill will also prohibit “gag clauses” that prevent pharmacists from telling patients when it would be cheaper to pay cash for drugs than putting them on their prescription cards. It will also allow pharmacists to substitute “bioequivalent” medications that are cheaper than those on the PBMs’ approved lists.

“People are hurting. The biggest cost driver in our system today is pharmaceuticals, and we haven’t been able to get our arms around it. It’s a messy supply chain,” Jensen told reporters after the bill passed.

Jensen is a physician, as is the chief House sponsor, Rep. Alice Mann. The Lakeville Democrat said many of her patients struggle to pay for their medications, and she hopes the legislation helps restore PBMs to their intended role of saving money.

“We have an industry that has no oversight and is doing what they want, and essentially benefiting off of the sick people in our state,” Mann said.

Jensen said the bill is just a first step. He said the next step should focus on the drug makers and require them to justify price increases, similar to what a Canadian government commission does. He acknowledged that would be hard for his fellow Republicans to accept “because it smacks of regulation,” but he said the unanimous Senate vote shows that they understand the need for “carefully conceived” regulation of the industry.