Senate Health & Human Services Committee Chair Senator Michelle Benson (R-Ham Lake) held a press conference on Friday with House Assistant Majority Leader Representative Mike Howard (D-Richfield) highlighting a bipartisan cost-savings bill that potentially will save taxpayers hundreds of millions of dollars if implemented. 

Senate File 2178 gives the state flexibility to share bid information submitted by pharmacy benefit managers (PBMs) for public employee contracts. The reverse auction process incentivizes PBMs to compete by submitting lower offers in subsequent rounds of bidding to win a contract. This leads to cost savings without impacting the quality of state health benefit plans.  

“This bill seems complicated but is in fact quite simple,” Benson said. “Inviting more competition into our state bidding process leads to better contracts for state employees which causes savings for taxpayers.”

Minnesota’s current PBM procurement process is complex and makes it difficult to compare bids. This bill permits a simpler process where PBMs compete for the best price under the same contract terms. New Jersey first implemented this reverse auction process in 2017 and is projected to have $2.5 billion in savings on drug spending for public employees in the first five years. 

“I have always made it a priority to work to lower health care costs and make government work more efficiently; this bill accomplishes both,” Benson said. “This legislation builds off our work in prior sessions to simplify the health procurement process and make PBMs accountable. Senate Republicans continue to lead the way pioneering thoughtful health care reform that makes a meaningful impact on people’s lives.”    
 

The bill was heard on Wednesday in the State Government & Elections Committee and was laid over for possible inclusion in the committee’s omnibus finance bill. Howard is carrying the bill in the House, where it awaits a hearing.