Through reverse auctions, Minnesota pushes for PBM savings and price transparency
Truveris has helped the State of Minnesota save more than $28 million in pharmacy benefits expenses over the next two years. Using the company’s technology, the state was able to evaluate bids from competing pharmacy benefit managers (PBMs).
Truveris’ technology allows health plan sponsors to conduct reverse auctions, in which PBMs must reply to detailed requests for proposals and make multiple bids if they wish to win contracts with large insurers. Minnesota’s State Employee Group Insurance Program (SEGIP) and Public Employers Insurance Program (PEIP) together held the reverse auction in 2021, after legislature was passed allowing them to do so. The legislation allowed the State of Minnesota to hire Truveris to conduct the auction and review invoices going forward to make sure the PBMs are abiding by the terms of their contract.
Through participating in a reverse auction process to select a PBM, Minnesota joins a growing number of states using reverse auctions for PBM services.
Beyond the $28.5 million savings in drug costs and fees, the State of Minnesota stands to save an additional almost $75 million over the next two years due to improved rebates from drug manufacturers.
The push for reverse auction came from both sides of the aisle. “We created a transparent, online marketplace like eBay for prescription drugs,” said Sen. Michelle Benson (R-Ham Lake). “PBMs had to underbid one another over multiple rounds to win the state contract.”
“The high cost of prescription drugs is out of control for far too many Minnesotans and this new bipartisan law takes a positive step to rein in those costs,” said Rep. Mike Howard (DFL-Richfield).
“Partnering in solidarity, we all stood strong for our members and Minnesota taxpayers, by demanding a transparent and accountable procurement process,” Brian Aldes, secretary-treasurer and principal officer of Teamsters Local 320, said of the reverse auction process. The union is part of the PBM Accountability Project of Minnesota, which lobbied for the legislation allowing the state to conduct reverse auctions for pharmacy benefits.
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