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Committee hears urgent testimony on single-PBM/PBA pharmacy reform; bill laid over amid fiscal and 340B questions
Summary
Representative Nadeausponsored House File 2242 would create a state-selected single pharmacy-benefit administrator (PBA) for the Medical Assistance pharmacy benefit. Sponsors and pharmacists said the change would stop below-cost reimbursements and prevent pharmacy closures; witnesses, members and DHS discussed 340B covered-entity protections,
Representative Nadeau introduced House File 2242, a major pharmacy-reform proposal to create a single state-selected pharmacy benefit administrator (PBA) or single PBM model for Medical Assistance drug benefit management and to change how Medicaid reimbursements are calculated and adjudicated.
Why it matters: Supporters — including independent pharmacists and pharmacy trade groups — said current managed‑care PBMs and contracting practices force pharmacies to accept below‑cost reimbursement (including “maximum allowable cost” lists) that make many dispensing transactions unprofitable and have driven pharmacy closures and pharmacy deserts across urban and rural Minnesota. They told the committee that shifting to a single PBA with acquisition‑cost transparency and higher dispensing fees could stabilize pharmacy reimbursement and preserve access.
Testimony and numbers: Independent pharmacists reported filling prescriptions at a loss, including a cited example where acquisition cost was reported at about $285 but reimbursement was $48.94 with a $0 dispensing fee; testifiers said 61% of independent pharmacies closed nationally in the last decade and that 17% of Minnesota ZIP codes lack any pharmacy. Witnesses described models from other states (Kentucky, Ohio, Virginia) that implemented single-administrator or transparent acquisition-cost methods and reported savings and stabilized access.
Concerns and technical issues: Members and DHS pharmacy staff discussed how a single PBA model would interact with 340B covered‑entity discounts. DHS’s pharmacy director explained the bill’s design intends to preserve 340B revenue on a claim‑by‑claim basis and avoid “double dipping” (manufacturers’ discounts plus state rebates), and cited Ohio’s actual acquisition‑cost approach as a model that reported large state savings. Members also asked for fiscal notes; sponsors said states that adopted similar models reported substantial savings but acknowledged implementation details and fiscal estimates vary by state.
Outcome: The committee adopted a DE amendment (technical changes) and laid House File 2242 over for possible inclusion in the omnibus bill. Sponsors urged follow-up work on fiscal impacts and protections for 340B covered entities.
