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SF 4062

Prohibit the use of spread pricing by pharmacy benefit managers

2025-2026 Regular Session Introduced by Liz Boldon and 1 co-sponsor

Minnesota bill bans pharmacy benefit managers from profiting on price differences between pharmacy reimbursement and insurer charges, aiming to lower drug costs.

Author added Boldon
#commerceandcommercedepartment #insurance #insurance-health
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Bill Summary · SF 4062

Legislative bill overview

SF 4062 would prohibit pharmacy benefit managers (PBMs) from using "spread pricing," a practice where PBMs pocket the difference between what they reimburse pharmacies and what they charge insurers or consumers for prescription medications. The bill aims to increase transparency and reduce hidden costs in the pharmacy supply chain by eliminating this profit mechanism.

Why is this important

Spread pricing is considered a major driver of pharmacy costs and has been identified as a significant source of PBM revenue that doesn't directly fund patient care or pharmacy operations. Prohibiting this practice could lower prescription drug costs for consumers and reduce financial pressure on independent pharmacies, which are particularly vulnerable to narrow PBM reimbursement rates. This aligns with ongoing national scrutiny of PBM business practices that have faced criticism from pharmacists, patients, and policymakers across party lines.

Potential points of contention

  • PBM business model impact: PBMs argue spread pricing helps them negotiate lower drug prices and manage costs; eliminating it could force them to restructure operations and potentially raise other fees or reduce services
  • Market competition concerns: Opponents may worry that restricting one profit mechanism could reduce competitive pressures if PBMs shift revenue models or consolidate further
  • Implementation complexity: Questions about how to define and enforce spread pricing prohibitions, distinguish legitimate rebates from prohibited spreads, and handle transitional compliance costs for affected businesses

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

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