Senate file would require PBM/manufacturers rebates passed to patients at point of sale; committee approves and refers to Commerce

Senate File 1877 would require that pharmaceutical rebates negotiated by pharmacy benefit managers (PBMs) and plans be applied at the point of sale so that enrollees receive the benefit of negotiated discounts when they purchase drugs.

Sponsor Senator Mann said the current rebate-driven market can result in patients paying more at the pharmacy counter while plans obtain larger rebates, and she said requiring point-of-sale pass-through would make negotiated discounts immediately available to patients.

Dan Andresen of the Minnesota Council of Health Plans said applying rebates at point of sale would shift savings away from lowering premiums—where rebates currently often are applied—to a subset of enrollees who fill rebated brand drugs, potentially increasing premiums for other members. He cautioned the proposal’s interaction with individual-market metal-tier design could create confusion for consumers choosing plans.

Michelle Mack of PCMA said the bill would raise health-care costs because manufacturers would reduce rebates if forced to apply them at the counter; her written estimate presented to the committee predicted higher drug spending in year 1 and over 10 years if rebates were applied at point of sale.

Sponsor answered that a Milliman study in Arkansas after that state's point-of-sale change showed no premium increase, and she urged passing on negotiated discounts to patients at the pharmacy counter.

The committee recommended the bill pass and referred Senate File 1877 to the Committee on Commerce and Consumer Protection.