Reverse auction procurement requirement for SEGIP pharmacy benefit contracts modified, use of spread pricing by pharmacy benefit managers prohibited, license application fees increased, fiduciary duties imposed, and money appropriated.

Minnesota House Bill HF2851 aimed to reform how the State Employee Group Insurance Program (SEGIP) manages its pharmacy benefits. The bill proposed several key changes: modifying the reverse auction process for selecting pharmacy benefit contracts to ensure more competitive and transparent pricing; prohibiting pharmacy benefit managers (PBMs) from using 'spread pricing,' a practice where PBMs charge insurers more than they reimburse pharmacies and keep the difference; increasing the application fees for PBM licenses; and imposing fiduciary duties on PBMs to act in the best interests of their clients. Additionally, the bill included provisions for appropriating funds to implement these changes. Introduced on March 26, 2025, the bill was referred to the House Health Finance and Policy Committee but did not advance beyond the committee stage.

Supporters of HF2851 argued that the bill would enhance transparency and fairness in the management of pharmacy benefits for state employees. By modifying the reverse auction process and banning spread pricing, the legislation aimed to reduce costs and ensure that savings are passed directly to the state and its employees. The imposition of fiduciary duties on PBMs was seen as a measure to align their operations more closely with the interests of their clients, promoting ethical practices within the industry.

Critics of HF2851 expressed concerns that the increased regulatory requirements and higher licensing fees could lead to reduced competition among PBMs, potentially resulting in higher costs for the state. Some industry representatives argued that the prohibition of spread pricing might limit the flexibility of PBMs to manage costs effectively. Additionally, there were apprehensions that imposing fiduciary duties could expose PBMs to increased legal liabilities, which might deter companies from operating in Minnesota's market.