Cap on Medicare drug prices statewide

Summary#

HF-5156 is an introduced Minnesota bill that would create a new section of state law, rather than amend a named existing Act. It would set price limits and pharmacy reimbursement rules for prescription drugs subject to the federal Medicare Drug Price Negotiation Program. Its stated goal, reflected in the bill’s title, is to establish prices for those drugs; it would take effect January 1, 2027, if enacted.

  • Drug makers could not accept payment above the federally set maximum fair price, plus applicable pharmacy dispensing and provider administration fees, for covered drugs intended for people in Minnesota.
  • Health plans and pharmacy benefit managers (PBMs) would have to reimburse pharmacies at least the greater of the maximum fair price or the national average drug acquisition cost (NADAC), plus any established dispensing fee.
  • Health plans and PBMs would have to give the Prescription Drug Affordability Board specified financial information about these drugs when the board requests it.
  • A drug maker withdrawing a covered drug to avoid the price limits would have to give the health commissioner written notice 180 days beforehand. A maker that withdraws without that notice would face a penalty for each drug: the greater of $100,000 or the drug’s annual savings, as determined by the board.

What it means for you#

  • People who use these drugs: The bill would set payment rules for covered drugs, but it does not directly change who is eligible for a drug or guarantee a lower out-of-pocket price.
  • Pharmacies: Health plans and PBMs would have to meet the bill’s minimum reimbursement rule. The bill also says pharmacies may receive a dispensing fee above the maximum fair price.
  • Drug makers: The price limit would apply to sales intended for people in Minnesota, whether in person, by mail, or by other means. A maker could withdraw a drug after giving the required advance notice; the bill does not impose the stated penalty for a withdrawal made with that notice.
  • Health plans and PBMs: They would have to follow the reimbursement rule and provide the board detailed payment and fee information upon request.
  • The board and health commissioner: The board would determine annual savings for the withdrawal penalty and could request financial information. The commissioner would assess penalties for withdrawals that violate the notice rule.

Money#

No cost information is available in the supplied material.

  • The bill sets payment rules and penalties but gives no estimate of public spending, savings, or revenue.
  • It requires the commissioner to assess penalties and health plans and PBMs to provide information, but does not estimate the cost of those duties or identify funding for them.
  • It does not state who would receive any penalty payments.

What is unclear#

  • The supplied material does not include the current statutes the bill refers to, so the full current-law context and data rules could not be verified.
  • The bill does not explain how the price limits would work alongside other rules or programs for these drugs.
  • It does not specify how the board would calculate annual savings for the withdrawal penalty.
  • It does not spell out how the advance-notice rule would be monitored or what happens after a drug maker gives notice.
  • The bill does not say whether the board’s requested financial information would be made public.

Case for#

  • A possible argument for the bill is that it would extend the federal maximum fair price rule to sales intended for people in Minnesota.
  • The pharmacy reimbursement minimum could help ensure that pharmacies receive at least the greater of the federal price or NADAC, plus an established dispensing fee.
  • Requiring detailed payment information could give the board more information about fees, rebates, and final payments for these drugs.
  • Advance notice and a penalty could discourage drug makers from withdrawing a drug specifically to avoid the state’s price limits.

Case against#

  • One concern is that the bill does not explain how its price and reimbursement rules would interact with other payment arrangements.
  • The bill gives no estimate of the cost of carrying out the board’s and commissioner’s duties, or of the compliance costs for plans, PBMs, pharmacies, and drug makers.
  • The annual-savings penalty depends on a calculation method the bill does not describe.
  • It is unclear what would happen to access to a drug if a maker gives notice and then withdraws it.