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SF 5046

Prescription Drug Affordability Advisory Council elimination

2025-2026 Regular Session Introduced by Matt Klein

Eliminates the Prescription Drug Affordability Advisory Council and shifts health plan regulation (HMOs and related duties) from the Department of Health to the Department of Comme

Pursuant to Senate Concurrent Resolution No. 6, referred to Rules and Administration
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Bill Summary · SF 5046

Summary of SF 5046 (2025-2026) — Minnesota

Note: This summary outlines the bill’s main purpose, key provisions, who is affected, and notable timelines. It reflects the introduced text as of April 2026.

Overall purpose and intent

  • Eliminate the Prescription Drug Affordability Advisory Council.
  • Reassign and realign regulatory and administrative responsibilities across agencies (notably transferring health plan and non-depository financial regulation duties to the Minnesota Department of Commerce).
  • Make housekeeping and structural changes to various statutes related to health plans, lending, virtual currency, debt services, and non-depository financial institutions.
  • Implement health plan regulatory alignment and related efficiency measures through the transfer of duties and staff.

Key provisions and changes

Article 1: Commerce Finance

  • Sec. 1-2: Transfer of health maintenance organization (HMO) and county-based purchaser regulatory responsibilities to the Commissioner of Commerce.
    • A new appropriation of $1,750,000 in FY 2027 from the General Fund to Commerce for regulation of HMOs and county-based purchasers.
    • Corresponding ongoing budget reductions to the Department of Health (DH) in FY 2027 to reflect the transfer: $1,750,000 to General Fund and $1,836,000 to State Government Special Revenue.

Article 2: Prescription Drug Affordability Advisory Council (elimination)

  • Sec. 1-4: Amends Minnesota Statutes (62J.89 et seq.) to redefine conflict-of-interest provisions and recusal requirements for board members, the advisory council, and related participants.
  • Sec. 2-3: Establishes procedures for identifying prescription drug products with significant affordability concerns based on:
    • Wholesale Acquisition Cost (WAC) changes (e.g., >15% or >$3,000 in 12 months, CPI-adjusted),
    • WAC thresholds (e.g., $60,000+ per year or per course of treatment),
    • Biosimilar price relationships (not at least 20% lower than referenced brand),
    • Specific criteria for generic drugs (e.g., WAC thresholds, price increases of 200%+ in 12 months).
  • The board (in consultation with the advisory council and the Commissioner of Health) may identify drugs; the list would be public with exceptions for proprietary data, trade secrets, or health data classified as not public.
  • Sec. 4: Repeals Minnesota Statutes 2024, sections 62J.86(2) and 62J.88 (existing provisions governing the advisory council) and repeals the Prescription Drug Affordability Advisory Council as of enactment.

Article 3: Non-Depository Institutions

  • Sec. 1-4: Broad regulatory amendments to various financial statutes (moving authority among Commerce, DH, and other entities) and updating definitions and processes for lending, consumer loans, and related licensing.
  • Sec. 5-7: Updates to rules governing virtual currency activities (Minnesota Statutes 53B.74), including recordkeeping, tangible net worth considerations, and regulatory alignment.
  • Sec. 8-14: Revisions to debt-related services and licensing regimes (debt management services, debt settlement services, and related registries), including repeals of certain old sections and alignment with modern oversight.
  • Sec. 11-14: Updates to lender registration requirements (58B.051), debt services providers (332A.04), and debt settlement services providers (332B.04) with enhanced reporting and application requirements.

Article 4: Health Plan Regulatory Alignment

  • Sec. 1-3: Substantive alignment of health plan regulation, including removal of multiplicity in oversight between Commerce and Health (transfer of HMOs; defining “commissioner” for health carriers and HMOs accordingly).
  • Sec. 4-15: Additional modifications to loss-ratio requirements, short-term health coverage, and premium regulation:
    • Amend loss-ratio standards and reporting for individual and small-employer markets, including the public release of loss ratio data.
    • Define and regulate short-term coverage (maximum 365 days total over 555 days, with specific conditions about preexisting conditions and combination with other plans).
    • Changes to cessation of individual market business and requirements upon cessation (notice to DH and Commerce, policyholder notices, and public information dissemination).
  • Sec. 16-21: Regulatory duties; transfer provisions:
    • Transfer of HMO regulatory oversight from the DH to the Commerce Department effective July 1, 2026.
    • Transfer of employee functions and protections, with related provisions around collective bargaining and employment terms post-transfer.
    • Management of ownership/operations transfer with protections for employees.
  • Sec. 18-21: Additional procedural updates:
    • Notice requirements for HMO changes; annual reporting by HMOs to the DH or Commerce; and other administrative provisions concerning compliance and enforcement.

Who and what would be affected

  • Health plan regulation:
    • Health Maintenance Organizations (HMOs) and county-based health plan purchasers (regulatory oversight shifting from DH to the Minnesota Department of Commerce, effective July 1, 2026).
    • Health plans, premiums, and loss-ratio reporting will be overseen with updated statutes and public reporting requirements.
  • Prescription drug policy:
    • Elimination of the Prescription Drug Affordability Advisory Council; the board/advisory council framework is repealed, with ongoing conflict-of-interest and transparency provisions retained in revised form.
    • Public identification and disclosure of certain high-cost drugs remain possible under board processes, but under new structure without the advisory council.
  • Financial and lending regulation:
    • Non-depository institutions, including mortgage-related entities, virtual currency activities, debt management, and debt settlement services, experience updated licensing, registration, and reporting requirements.
    • Transfer of regulatory responsibilities among Commerce, DH, and related agencies.
  • Data and transparency:
    • Expanded public disclosure of certain drug-price information (subject to privacy and trade-secret protections).
    • Public reporting on health plan loss ratios and enrollment metrics.

Procedural and timeline aspects

  • Transfer of HMO oversight from DH to Commerce: effective July 1, 2026.
  • FY 2027 appropriations and budget adjustments:
    • $1,750,000 General Fund for Commerce to regulate HMOs and county-based purchasers (Sec. 1).
    • Corresponding reductions to DH’s FY 2027 appropriations to reflect the transfer (Sec. 2).
  • Repeal of the Prescription Drug Affordability Advisory Council provisions is included in Article 2, Sec. 4.
  • Various updates become effective upon enactment or on specified dates as indicated in the statutes (e.g., licensing and registration requirements effective January 1, 2025 for lender registration; ongoing annual reporting and public data releases for loss ratios).

Note: The bill includes broad, technical amendments to numerous Minnesota Statutes, consolidating regulatory oversight and updating license, reporting, and data-sharing requirements across multiple sectors. If you need a section-by-section carryover map or a plain-language explainer for specific sections (e.g., 62J.89 conflicts, 62A loss ratios, or 60-series health plan provisions), I can provide that too.

Compiled from official sources — confirm details with the bill’s official record.

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