This bill mandates that pharmacy benefit managers and health carriers in Minnesota must include lower-cost drugs in their formularies. Specifically, if a formulary includes a brand name drug, it must also include the equivalent generic drug if it has a lower wholesale acquisition cost. Similarly, if a formulary includes a generic drug, it must also include the brand name drug if it is cheaper. The bill also requires that newly approved generic drugs and biosimilars with lower costs than existing formulary options must be made available immediately.

Additionally, the bill stipulates that formulary structures and tiering must prioritize drugs with the lowest out-of-pocket costs for patients, prohibiting any prior authorization or step therapy requirements that could hinder access to these lower-cost options. The effective date for these provisions is set for January 1, 2026.