This bill mandates that pharmacy benefit managers and health carriers in Minnesota must utilize any compensation received from drug manufacturers, such as prescription drug rebates, to directly benefit covered persons at the point of sale. Specifically, it requires that all compensation be remitted to the covered person to reduce their out-of-pocket costs for prescription drugs, unless the cost-sharing obligation is already lower than the adjusted out-of-pocket cost. In such cases, the retained compensation must be used to offset future premiums or costs for covered persons. Additionally, contracts with pharmacy benefit managers under the state employee group insurance program must ensure compliance with these requirements.

The bill also introduces definitions for key terms such as "compensation" and "cost-sharing obligation," and establishes a reporting requirement for pharmacy benefit managers and health carriers. Starting March 1, 2026, these entities must submit annual reports to the commissioner detailing their compliance with the new regulations. The provisions of this bill are set to take effect on January 1, 2026.