Pharmacy benefit managers and health carriers required to include lower-cost drugs in their formularies, and formulary structure and formulary tiering for each health plan required to give preference to drug with lowest out-of-pocket cost to patient.

This bill requires pharmacy benefit managers and health carriers in Minnesota to include lower-cost generic and biosimilar drugs on their drug lists whenever a more expensive brand-name version is covered. It mandates that these plans structure their coverage tiers to prioritize medications that result in the lowest out-of-pocket costs for patients, such as co-pays and coinsurance. Additionally, the law forces plans to immediately add new generic or biosimilar drugs to their lists if they are cheaper than existing options and removes barriers like prior authorization for the lowest-cost alternatives. These changes directly affect health insurance companies and pharmacy benefit managers by altering how they select and organize covered medications to reduce expenses for individuals.