On September 30, 2019, the Minnesota Department of Commerce (Department) published in the State Register its Request for Comments relating to an upcoming rulemaking relating to Pharmacy Benefit Manager (PBM) Licensure and Regulation. According to the Request for Comments, the Department is evaluating “rules needed to establish explicit requirements for licensure and renewal of PBMs doing business in the State of Minnesota with various plan sponsors.” The Department is also considering the need for rules relating to “data collection, transparency reporting, enforcement standards, and other items needed as they come up” to implement the Minnesota Pharmacy Benefit Manager Licensure and Regulation Act (PBM Act), which the Minnesota Legislature passed earlier this year.

As noted in the Department’s solicitation for comments and under the PBM Act, PBMs serve as an intermediary between health plans and plan sponsors, negotiating prices with pharmaceutical manufacturers, managing drug formulary lists, processing claims, and reviewing requests for clinical appropriateness. Under the new law, all PBMs contracting with plan sponsors in the State must have a valid license from the Department, effective January 1, 2020. This new license is in addition to the third-party administrator (TPA) license issued by the Department, which most PBMs likely already have.

The Department notes that its Request for Comments should be of interest not only to PBMs and TPAs, but also to employer plan sponsors, health insurance companies, pharmacists, and consumers of prescription drugs.

A Request for Comments is one of the first steps that an agency takes when it begins the formal rulemaking process under Minnesota law. The rulemaking must be completed by December 31, 2021. Individuals or businesses interested in participating in the rulemaking process are strongly encouraged to do so now, prior to the drafting of the proposed rules.

For assistance in preparing and submitting comments as part of the rulemaking process, or for any other questions regarding this Alert, please feel free to contact David Aafedt or any other member of our Regulatory & Government Relations team.

September 30, 2019