This bill mandates that pharmacy benefit managers and health carriers in Minnesota include lower-cost drugs in their formularies, specifically requiring that the formulary structure and tiering prioritize drugs with the lowest out-of-pocket costs for patients. The bill introduces new legal language under Minnesota Statutes, chapter 62W, which defines various terms related to drug classifications, such as "biologic," "biosimilar," "brand name drug," and "generic drug." It stipulates that if a brand name drug is included in a formulary, the equivalent generic drug with a lower wholesale acquisition cost must also be included, and similar requirements apply to biologics and biosimilars.

Additionally, the bill requires that newly approved generic drugs and biosimilars with lower wholesale acquisition costs than existing formulary drugs must be made available immediately. It emphasizes that pharmacy benefit managers and health carriers must structure their formularies to favor drugs with the lowest out-of-pocket costs, prohibiting any prior authorization or step therapy requirements that could hinder patient access to these drugs. The provisions of this bill are set to take effect on January 1, 2025.