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Minnesota is on the cusp of a major health-policy achievement. Why it matters.

Bipartisan legislation would dramatically lower prescription drug costs in the state system, saving taxpayers millions of dollars.

How much is a drug going to cost? Where can we find that information? Who even sets the prices?
How much is a drug going to cost? Where can we find that information? Who even sets the prices?
REUTERS/Bryan Woolston

In Minnesota, we believe in fairness, honesty and getting along with each other. When it comes to prescription drug prices, however, some companies have a hard time living up to these values. How much is a drug going to cost? Where can we find that information? Who even sets the prices? The Legislature now has an opportunity to find consensus and dramatically lower prescription drug costs in the state system, saving taxpayers millions of dollars. Our organizations have partnered with labor organizations, Democrats, Republicans, health care advocacy groups, and business interests to pass meaningful pharmaceutical reforms in the state system.

The current process clearly advantages the Pharmaceutical Benefit Manager (PBM) companies over the interests of our members and the state. The current process lacks the necessary competition and transparency to find savings and reduce the costs of prescription medicines supplied by the state’s PBMs. The reforms we are working to pass will fix this.

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Bidding competitions

Here’s how it works: PBMs would compete in a reverse auction. Reverse auctions are fully transparent, multi-round bidding competitions – which will encourage companies to continually bid in Minnesota’s favor, offering the state the best possible deal. This reverse auction process would be supported by a state-of-the-art data analytics system to measure each bid against one another and then hold PBMs accountable through ongoing validation of claims and charges. Put simply, we use the latest technology to safeguard against paying more than we need to while moving forward with an approach that begins to help solve a decades-old problem for working families. And an amendment adopted by the House ensures that worker voices are at the table throughout the new process.

Megan Dayton
Megan Dayton
New Jersey has put this idea into action and cut its drug spending by $2.5 billion over five years without having to reduce prescription drug benefits for its state employees. New Hampshire and Maryland have followed suit and enacted this innovative concept as well. We’re seeing that states are realizing that they don’t have to accept opaque PBM business practices that result in higher costs for residents.The state relies too heavily on the current PBMs to determine what benefits, and costs will be for medicine, without any meaningful audits. In Minnesota’s defense, it’s extremely difficult for any state to manage this under the current system given that PBM business practices are notoriously complex and largely hidden from public view. What we do know is that the three companies that dominate the PBM marketplace are climbing up the Fortune 500 list while working Minnesota families keep paying more for medications.

Fundamental reform

To this end, we are strongly supporting bipartisan legislation introduced in the Minnesota Legislature by Sen. Michelle Benson, R- Ham Lake, and Rep. Michael Howard, DFL-Richfield. The legislation fundamentally changes how Minnesota contracts with PBMs and creates a framework in which companies would have to deliver value to taxpayers and consumers.

Brent Jeffers
Brent Jeffers
We applaud these lawmakers for bringing labor to the table to help develop a solution that will deliver results for Minnesota workers, rather than pharmaceutical middlemen. When it’s all said and done, it could be one of the most meaningful health care policies that Minnesota has adopted in decades – a monumental bipartisan achievement at a time when few exist.

Megan Dayton is the statewide president of Minnesota Association of Professional Employees (MAPE). Brent Jeffers is the president of the Inter Faculty Organization (IFO), which represents the interests of faculty at the seven Minnesota State universities.

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